Higher federal allocation to boost state’s rural infrastructure

KUCHING: Budget 2027 must account for Sarawak’s vast geography and higher delivery costs to turn allocations into better services and higher incomes.

i-CATS University College’s Associate Professor Abu Sofian Yaacob said infrastructure spending, household assistance, business support and human capital development could stimulate economic activity while strengthening long-term growth.

However, national policies needed to reflect the challenges of serving the state’s dispersed population.

“Large allocations do not necessarily translate into adequate coverage, given the state’s size, scattered settlements and the cost of delivering services.

“Success must be measured through more reliable water and electricity supplies, better access to roads, schools and clinics, and improvements in people’s real incomes,” he told Sarawak Tribune in his response to Budget 2027.

Abu Sofian said funding allocations should take into account geographical size, remoteness, infrastructure gaps and construction costs, rather than relying solely on population figures.

He stressed that higher allocations alone would not necessarily bridge development gaps, as rising construction and transportation costs could erode the value of additional funding.

“Assessments should distinguish between operating and development expenditure, new projects and existing commitments, as well as announced allocations and actual spending,” he said.

He also called for multi-year funding commitments to ensure major infrastructure projects could proceed without disruption.

On road development, Abu Sofian said improved connectivity could reduce travel times, vehicle maintenance costs and agricultural losses while expanding farmers’ access to markets.

However, he stressed that these benefits would depend on comprehensive road networks linking agricultural production areas to main roads, collection centres and markets, supported by adequate village access roads, bridges, drainage systems and regular maintenance.

“Lower logistics costs must also be monitored to ensure they translate into lower consumer prices and better returns for farmers,” he added.

Turning to the proposed Sibu Special Economic Zone (SEZ), Abu Sofian said attracting investors would require greater certainty over its location, infrastructure readiness, regulatory approvals and operating framework.

He identified agrofood processing, sustainably sourced value-added timber products, marine engineering, ship repair, logistics and warehousing as potential growth sectors, subject to market feasibility studies.

To strengthen the zone’s investment appeal, he proposed a combination of targeted tax incentives, industrial land availability, reliable utilities, streamlined one-stop approvals and workforce training grants.

“Incentives should be tied to well-paid jobs, training for local workers and the use of Sarawak suppliers so that investment generates lasting benefits,” he said.

On micro, small and medium enterprises (MSMEs), Abu Sofian said tax reductions alone would provide limited relief to businesses grappling with rising transportation, raw material and labour costs.

He stressed that such measures should be complemented by accessible working capital financing, prompt payments to suppliers and support for automation and marketing to strengthen business competitiveness.

Meanwhile, he cautioned that higher living costs in remote areas could erode the purchasing power of assistance provided under Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA).

He called for wider access to participating SARA retailers, consistent supplies of essential goods and closer monitoring of retail prices to ensure assistance reached those most in need.

On human capital development, Abu Sofian said scholarship programmes should be aligned with projected workforce demand and complemented by paid industrial placements and employment opportunities for graduates.

He added that competitive salaries and clear career advancement pathways were crucial to attracting Sarawakian graduates back to the state and retaining local talent.