From Decline to Growth in Sabah’s GDP under GRS

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KOTA KINABALU: Sabah recorded a positive 3.7% growth in GDP last year, a trend that the GRS government has consistently achieved since taking office in late 2020. 

This marks an encouraging start to the GRS’ first term, with a 1.1% growth in its first full year in 2021.

For the record, under the Warisan government, GDP growth fell from a high of 8.2% in 2017 to 1.5% in 2018 after Warisan took office. It further contracted to 0.5% and -9.2% in 2019 and 2020 respectively.

Associate Prof Dr Firdausi Suffian, a senior lecturer in Political Economy at Sabah Universiti Teknologi Mara (UiTM), credited the continuous growth of Sabah’s GDP to the GRS government’s resilience and robust planning, supported by the Sabah Maju Jaya (SMJ) initiative. 

“The SMJ plan, in particular, has been pivotal in boosting government spending and contributing to economic recovery,” he said.

“Without the strategic direction provided by the GRS government through this plan, the situation could have been far worse. 

“The emphasis on various sectors, such as services, tourism, palm oil, oil and gas, agriculture, construction, and manufacturing, underlines the multifaceted approach taken to ensure a balanced and sustainable recovery.”

However, Firdausi added that while GDP is indeed a valuable indicator of economic performance, it’s essential to view this in the context of broader societal goals and the unique challenges faced. 

“It’s crucial to acknowledge that while our GDP growth looks promising, challenges remain. In Sabah’s case, even with high GDP and positive growth rate, poverty and unemployment rates remain high,” he said.

He explained that GDP gives an impression of whether the economy is progressing, but it does not capture the level of poverty, income distribution, unemployment, or the standard of living.

Firdausi claimed that the contraction in 2020 was expected due to declining palm oil demand, followed by pandemic-related issues. Reopening the border and loosening the movement control order and other limitations during the pandemic have helped the economy to rebound.

“I think the Sabah government still has much work to do, but one thing is for sure: without the SMJ initiative to boost government spending, our GDP growth could have been worse,” he said.

Firdausi pointed out that, thanks to the GRS government’s initiative, Sabah has become one of the key contributors to the country’s GDP this year. The SMJ’s three main thrusts of agriculture, tourism, and manufacturing have shown significant growth across the board.

“But the government must address the high unemployment rate in the state. We are ranked third lowest in median monthly wage (RM1,782), and with the rising cost pushed by inflation, increasing people’s income must be next on the government’s agenda.

“The Ekonomi Madani plan has already rolled out certain initiatives to improve wages via a progressive salary model and restructuring our economy. 

“Sabah has much to do in this regard, specifically because the primary constraint of economic development is the lack of full drive decentralisation,” he said.

Nevertheless, Firdausi contended that the GDP growth under the GRS government reflects a determined effort to steer Sabah out of challenging times and into a more prosperous future. 

While the road to full recovery is still long, he believes that Sabah is heading in the right direction.

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