KUCHING: The increment of development allocation for Sarawak in the tabling of Budget 2025 is both timely and necessary due to several unique challenges faced by the state, said Universiti Malaysia Sarawak (UNIMAS) economist Dr. Dzul Hadzwan Husaini.
He told Sarawak Tribune that the additional financial injection is vital to ensuring more balanced development between East and West Malaysia.
“It will help close infrastructure gaps and enhance economic opportunities, particularly in rural communities. This, in turn, can contribute to reducing inequality and promoting more inclusive growth across the state,” he said.
Explaining further on the matter, he said that Sarawak, along with Sabah, covers a vast geographical area, and the population is widely dispersed across rural regions.
“These rural areas remain dominant in terms of land coverage but are still underserved by essential infrastructure, such as roads, electricity, water, and digital connectivity.
“The size and remoteness of these areas make infrastructure development more expensive and logistically challenging,” he said.
Meanwhile, touching on the doubling of the Special Grant to RM600 million starting in 2025, he opined that it is a positive step towards addressing long-standing fiscal issues between the federal government and East Malaysia.
While highlighting that it is important to recognise that both Sabah and Sarawak contribute significant revenue through their natural resources, he said that as part of the formation of Malaysia, the two states ceded much of this revenue to the federal government to be managed for national interests.
“The right to receive special financial allocations was stipulated in the Malaysia Agreement 1963 (MA63), but over the years, this provision has been largely overlooked. Restoring the Special Grant aligns with the commitments outlined in MA63, marking an important step towards rebalancing federal-state relations.
“The grant will offer Sarawak greater fiscal flexibility, allowing it to prioritise infrastructure and social development projects that directly benefit its residents.
“Not only that, it may also encourage the state to explore long-term development strategies, such as investments in green energy and digital transformation, which align with its economic potential,” he said.
