Malaysian Economy - Sarawak Corridor of Renewable Energy

Introduction        1

Background        2

Rationale of Sarawak Corridor of Renewable Energy (SCORE)        5

Expectation/target        8

Progress        10

Achievement        12

References        15

Introduction

In 2006, the Malaysian government announced the establishment of the Ninth Malaysia Plan in order to bring the region into a balanced development of society and the economy, to further promote free trade, to promote investment to expand economic momentum, to achieve the vision of developing countries in 2020. According to the regional industrial and natural conditions, the five economic development corridors of different development strategies and industrial clustering policy, and tax, land, foreign workers and a variety of customization incentives to attract domestic and foreigners investment in the region's key industries. In 2011, the "Regional Center City and Economic Corridor Reconstruction Project" was further released to examine the current development issues in the regions and to emphasize the future development of key second-tier cities.

The five cities and regional economic corridors included the Iskandar Malaysia in Southern Johor (IRDA), the Northern Corridor Economic Region (NCER), the East Coast Economic Region (ECER), the Sarawak Corridor of Renewable Energy (SCORE) and the Sabah Development Corridor (SDC).

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Sarawak Corridor of Renewable Energy (SCORE) is based on wealth of water, coal, natural gas and other competitive resources to encourage energy and energy-intensive industries stationed, such as metal or steel smelter. Over the past two years, a total of 11 companies have been approved for approximately RM212 billion.

During the global downturn, Malaysia's economy has bucked the trend by showing a very strong growth. In the case of low inflation and low unemployment during year 2002, Malaysia's economic growth of 5.6% had showed the domestic and foreign investment were in a stable growth. Compared to 2009, the average annual growth rate of household income in 2012 was 7.2%, and per capita national income increased by 49%. According to A.T.Kearney's FDI Confidence Index, Malaysia jumped from 21st in 2010 to No. 10 in 2012, showing its government's economic development had attracted many potential investments with significant results.

Background

SCORE is located in the eastern part of Malaysia, Borneo. It is one of the five which introduced in 2008 and is managed by the Regional Corridors Development Authorities (RECODA). Different from other economic corridor plan, SCORE is to hydroelectric power which acts as the main axis. Located in the northern coast of Borneo, Sarawak is the state of the poorest and most rural area in Malaysia. The state's high-income economic position is to pay more attention to the production of cheap electricity to attract manufacturing and industry. Sarawak is now supplying power from diesel, coal and natural gas that are operated or purchased by the National Electricity Company, and the state's highest power demand is 1250 megawatts per year. According to the plan, the SCORE will build 50 dams to produce 20 GW of electricity.

SCORE covers an area of about 70,000 square kilometres, from the Sarikei Division in Tanjung Manis to Bintulu coastal area of about 320 km, and extended to the surrounding areas and hinterland, have about 600,800 people living in that area. There are four main villages in SCORE which included Sarikei Division, Sibu, Mukah and Bintulu. The core of SCORE is energy resources, especially hydroelectric power (20,000 MW) of coal (1.46 million tons) and natural gas (40 trillion 9000 cubic feet), while the central area of Sarawak is rich in the amount of natural resources which can be sales and this has increased the competitiveness in order to encourage domestic and foreign entrepreneurs to invest in corridors.

SCORE Plan

SCORE covers an area of 70,000 square kilometres. Among them, the Tunoh have been selected as the five new growth points, with different focus areas which included Samalaju, Tanjung Manis, Mukah, Baram and Tunoh.

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Samalaju

Samalaju became a new heavy industry centre because of the attractive energy costs. Investors have committed $9 billion in investment for Samalaju Industrial Park in Sarawak which is located 60 km northeast of Bintulu by road. Previously, the first phase of Samalaju deep sea port was scheduled to be completed between years 2013 to 2016 period, however it is actually completed is year 2017. 

Tanjung Manis

Tanjung Manis will develop into industrial port cities and halal centres, with the advantage of large foundations, extensive infrastructure, deep-water ports and airports. The port will have an annual capacity of 200,000 TEUs and 6 million tons of general cargo.

Mukah

RECODA is being headquartered in Mukah at the center of SCORE. Mukah will be built into Smart City, as well as Polytechnic and specialized centres, to provide training for skilled and semi-skilled employees in the Sarawak Renewable Energy Corridor.

Baram

Baram focuses on hydroelectric power, tourism, and resource-based industries that use renewable plantation timber to promote the preservation of rainforests with responsible forest management practices, and eco-tourism that allows visitors to experience the natural world of the rainforest.

Tunoh

Tunoh is specially in planting oil palm oil and forest cultivation, agriculture and ecotourism as its potential economic activity.

Rationale of Sarawak Corridor of Renewable Energy (SCORE)

Sarawak Corridor of Renewable Energy is considered by investors as a long term plan in which their Strategic Framework consists of investing in ten major industries that are considered very attractive as the industries bring a lot of profit to the investors. Hence, the framework will help investors to see more potential in Sarawak and by investing in it; it will help develop Sarawak’s industrial and economic development.

        In order to achieve the Corridor’s objectives and visions, the Corridor’s Framework is supported by three main strategies, namely industrial development strategy, institutional development strategy and marketing strategy. These main strategies for the Corridor’s Framework however, are supported by three other basic development strategies such as infrastructure development strategy, human resource development strategy and power sector development strategy. These are the strategies that the Corridor uses in order to achieve or support Sarawak’s development plan. This development plan was formed by the hands of both public and private sector investors as they worked together. Their aim is that there would be approximately RM334 billion invested in most of their aspects such as industrial projects, infrastructure, human resources development, power sector and institutions. Private sector alone is expected to contribute roughly RM200 billion for the Corridor’s industrial investments.