Economy of Sarawak

Sarawak is blessed with an abundance of natural resources. LNG and petroleum have provided the mainstay of the state's economy for decades. Sarawak is also one of the world's largest exporters of tropical hardwood timber and is the major contributor to Malaysian exports. This has led to wide scale deforestation of Sarawak's rainforest. The last UN statistics estimated Sarawak's sawlog exports at an average of 14109000 m³ between 1996 and 2000.

With such vast land expanse, Sarawak has large tracts of land suitable for commercial agricultural development. Approximately 32% or about 40,000 km² of the state's total land area has been identified as suitable agricultural land. Nevertheless, less than 9% of this is planted with productive permanent crops, while the balance is still under shifting cultivation for hill paddy (rice) which is estimated at more than 16,000 km². The main commercial crops are oil palm, which has been increasing steadily over the years, sago, and pepper.

Since the 1980s, Sarawak has started to diversify and transform its economy into a more industrialized one. This endeavor has been seeing continuing success, with manufacturing and high-tech industries now playing a significant role in shaping the economic expansion of the state.

The global economic environment is expected to remain robust and dynamic right up to the next decade, with both the industrial and developing countries anticipated to maintain sustainable output growth. Global trade is predicted to expand by about 8%. This continuing favorable external outlook should keep the high growth momentum of the state's economy at a steady and stable level.

As the largest state in the Federation of Malaysia, Sarawak aims to be a fully developed state along with the rest of the country by 2020. Sarawak has identified four sectors as key sources of growth:

• Manufacturing
• Commercial
• Agriculture
• Construction
• Services sectors

The availability of vast competitively-priced land and rich reserves of natural resources has made Sarawak an attractive choice for manufacturing operations among investors.

Agriculture, Logging Industry and Land Usage in Sarawak

Sarawak's rainforests have been gradually depleted by the demand driven by the logging industry and the following introduction of palm oil plantations. Many of Sarawak's rural communities have felt changes affected by the economic activity of these industries. Peaceful protests and timber blockades between native communities and logging companies are common, often resulting in preventive police action.

The Penan, Borneo's nomadic hunter gatherers have been most affected by these changes, complaining of illness through polluted rivers, game depletion resulting in widespread hunger and loss of traditional medicines and forest products. Their resistance to logging companies culminated in a series of protests and timber blockades in the 1990s, of which many were dismantled by the Police, within the remit of the Law. The Penan claim that their rights are not respected by the State nor by logging companies. Another example, the native customary rights court case of Rumah Nor in the Kemena Basin gave rural communities engaged in subsistence farming hope for continued communal use of land reserves. Although the Court of Appeal ruled against Rumah Nor on the grounds that they had not produced sufficient evidence for their claim, it nevertheless upheld the principles stated by the lower court.

These principles are the basis of not only Rumah Nor's claim, but of the claims of all Sarawak's native communities, namely:

(i) that native customary rights are NOT created by legislation, although they can be extinguished by legislation, on condition of adequate compensation.

(ii) that these communities have a territory including forest reserves and rivers, and farmland, including land under fallow.

Thus, although the Court of Appeal ruled against Rumah Nor's specific claims, it upheld the lower court's ruling in favour of Rumah Nor with regard to the general principles. In this sense, it represents a significant blow to the state's claims that native customary rights comprise only those rights recognised by the state through its legislation.