Economy
Sabah's economy was traditionally heavily lumber dependent, based on export of tropical timber, but with increasing depletion of the natural forests and ecological efforts to save remaining natural rainforest areas, palm oil has emerged as a more sustainable resource. Other agricultural products important in the Sabah economy include rubber and cacao. Tourism is currently the second largest contributor to the economy. There are other exports like seafood and vegetables.
In 1970, Sabah ranked as one of the richest states in the federation, with a per capita GDP second only to Selangor (which then included Kuala Lumpur). However, despite its vast wealth of natural resources, Sabah is currently the poorest of Malaysia's states. Average incomes are now among the lowest in Malaysia, and with a considerably higher cost of living than in West Malaysia. In 2000 Sabah had an unemployment rate of 5.6 per cent, the highest of any Malaysian state and almost twice the national average of 3.1 per cent. The state has the highest poverty level in the country at 16 per cent, more than three times the national average. Part of the problem is the inequitable distribution of wealth between state and federal governments, and large numbers of illegal immigrants from Indonesia, the Philippines, even East Timor, whose population was estimated to be in the region of half a million people. In 2004 the poverty level worsened to 22 per cent.
The recent tabling of the Ninth Malaysia Plan has allocated RM16.908 billion for Sabah, the second highest state allocation after Sarawak's but it is still only 8% of the total national budget for a population of Sabah of more than 13%, and an area of more than 25%. This is clearly discriminatory and has contributed to the State of Sabah having the largest number of people below the poverty line in Malaysia, and lower than the Indonesian national poverty rate and in the same level as Aceh and Myanmar based on 2004 United Nations figures.
The fund is pledged to improve the state's rural areas, improve the state's transportation and utilities infrastructures, and boost the economy of Sabah. The government has placed its focus on three major areas of the economy which have the potential to be Sabah's growth engine. These are agriculture, manufacturing and tourism.
When this discriminatory budget against Sabah and Sarawak was pointed out, the allocation for Sabah was increased from the earlier figure of 15.7 billion RM while there is none for Sarawak. The reason given to Sarawak's Chief Minister, as reported by Borneo Post (11 November 2007) is that it is not economical to develop Sarawak. Sarawak is to be the source of renewable resources for Malaya. This situation applies to Sabah as well except that Sarawak's renewable resources are not even meant for Sabah. The percentage of the total budget is still much less than Sabah's population and area burdens, and this is a classic example of too little and too late.
