Sarawak, historically viewed as a periphery of Malaysia, is rapidly emerging as a “Green State” spearheading multiple ambitious projects within the federation. How is such a transformation possible? The answer lies in a convergence of shifting global trends toward sustainability and digital industries — which require clean electricity — and, more critically, a fundamental restructuring of federal-state relations, specifically between Semenanjung (the peninsula) and Sarawak. This shift is deeply rooted in the fragmentation of peninsular politics and the simultaneous consolidation of a locally centered leadership in Sarawak. This unique, simultaneous extra- and intra-state political moment has allowed the state to pivot from a passive resource supplier to a proactive economic powerhouse.

Sarawak is abundant in natural resources, historically relying on timber from its vast forests and, more importantly, on oil and gas produced off its coast. In fact, Sarawak is estimated to hold approximately 29 percent of Malaysia’s crude oil and 54 percent of its natural gas reserves, which have long supported Petroliam Nasional (Petronas), the national oil custodian based in Kuala Lumpur. 

Despite this advantage, in Malaysian politics, Sarawak has long lagged politically as a periphery. At the federal level, Sarawak, along with Sabah, served for decades as the “fixed deposit” for the Barisan Nasional (BN) coalition, subordinating its interests to Semenanjung politics, which gradually eroded its autonomy. While the logging and timber industry supported the long rule of former Chief Minister Tun Pehin Sri Abdul Taib Mahmud, the key benefits of the oil and gas reserves were mainly channeled to serve federal interests centered in the peninsula.

The turning point came in 2018, when the long-standing equilibrium of BN rule collapsed, resulting in a change of government and a peninsular political landscape that became increasingly fluid and fragmented. The critical timing came later in 2022, following the 15th General Election (GE15), when no single coalition gained a simple majority in Parliament. In such a situation, the Gabungan Parti Sarawak (GPS) emerged as the decisive “Kingmaker,” ultimately enabling the formation of the Kerajaan........

© The Diplomat