Malaysia is one of the key states for the realization of the new Silk Road because of the strategic importance of the Strait of Malacca. In the long run, Malaysia is expected to host a segment of the economic corridor linking China’s Yunnan province to Singapore.
After delaying some of the BRI projects and revising their funding, Mahathir Mohamad, Malaysia’s Prime Minister, in April 2019, agreed to the construction of the East Coast Railway (ECRL) in the Malay Peninsula.
Other parts of Malaysia are also interested in the BRI, such as the state of Sabah on Borneo island.
In July 2019, Sabah’s Chief Minister Mohd Shafie stated that the BRI could have a positive impact on the development of this state. The state of Sabah is home to a strong Chinese origin (which forms about 20% of the population), and Mohd Shafie hopes that this community can serve as an intermediary to develop Chinese investments in his state.
Sabah has already become a popular destination for Chinese tourists. In 2017, the state attracted more than 400,000 visitors from China, representing a third of foreign tourists. Authorities plan to build a new airport in Kota Kinabalu, the state capital; Chinese companies could be involved in the financing and construction of this airport.
The state of Sabah faces an important environmental challenge. Today, 20% of its area is dedicated to the exploitation of palm oil, Sabah produces 7% of world palm oil production. The implementation of the BRI could help reduce the state’s dependence on palm oil and develop other sectors with less negative impact on the environment.
Complementarities may exist between the BRI and the Sabah Development Corridor inaugurated in 2008. In 2016, this corridor entered its third phase of development, which consists in becoming a major destination for foreign investors thanks to the construction of adequate infrastructure and the training of a skilled workforce. With teh BRI, the state of Sabah will get better connected to major Asian and global markets.
It is now time for European companies to have a better look at Sabah Development Corridor and the new projects that will be developed in Borneo thanks to the BRI.