The glorified timber Once, contributed to an economic boom in Sabah in the 70's and 80's. Leading the role nowadays seems to be an oily business, with two main economic source provider namely the Oil and gas-and Palm Oil.
"Within the next five years, the oil and gas downstream processing industry is projected to act as a major contributor to Sabah’s manufacturing sector and to the State’s overall socio-economic sector." According to Chief Minister Musa Aman during a speech in his opening speech at the 2nd Sabah Oil and Gas Conference previously this year.
The Oil industry concentrates more capital than any other Industry. The global economy is more sensitive to the oil and gas development more than to other industries.
The stronger economies in the world such as the United States, Europe, China, Japan, Korea and Taiwan testified that they have successfully maximized on their available resources.
Malaysia is one of the world’s largest natural gas and crude oil reserves and Sabah contributes 14% of natural gas and 30% of crude oil reserves.
Sabah reserves could increase significantly due to deepwater discovery and development of several new offshore fields. Sabah will also become the second largest oil producing state after Terengganu.
Traditionally, timber export was the main resource of Sabah’s economy, but with efforts to save forests and its flora and fauna, palm oil trade has emerged as an alternative trade.
If Sabah were an independent country, it would be the world’s third largest producer of palm oil.
Such a statement was an indication of how important the role palm oil has played in the state’s growth to date – and what is in store for the future.
According to the Malaysian Palm Oil Board (MPOB), in 2009, Sabah had the largest area under oil palm cultivation than any state, at 1.36 million hectares out of the national total of 4.69 million hectares (ha).
Eastern Sabah has been identified as being an extremely good location for oil palm, particularly in Tawau, Lahad Datu and Sandakan.
The palm oil industry will have to take a leading role because of the linkages it has with other sectors – from energy to construction and manufacturing – and of course, due to the sheer size of the industry compared with the others in Sabah. Palm Oil Industry Cluster of Sawit Kinabalu Bhd (POIC) Lahad Datu was also promoting industries that would use the large volume of biomass generated from Sabah’s oil palm plantations.
Both of these Industries are currently leading as the state's main economic provider. Several key initiatives under the NKEA will also be implemented which will be harnessing more investors as well as future projects development in the future.
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