Labuan-Sabah synergy crucial for island's future, says group

The Federal Territory of Labuan is known for its status as an international business and finance centre, a thriving hub for oil and gas industries as well as a burgeoning hotspot for tourism.

KOTA KINABALU: Labuan’s future hinges on its alignment with Sabah’s development plans, says Labuan Chamber of Commerce (LCC) chairman Daniel Doughty.

“It’s crucial for Labuan to synergise with Sabah, leveraging our collective strengths to drive our economic ambitions. Together, we can grow stronger economically,” he said.

Doughty was addressing talk surrounding Labuan’s status and its potential return to Sabah.

“How can Labuan – with 80 government agencies serving a population of less than 100,000 and a divided administrative structure between state and federal reporting – expect a different outcome in its regional economic role over the next 40 years if it continues under the same federal territory administration without significant strategic or administrative reforms?” Doughty asked.

He was also critical of the launch of the Tun Razak Exchange (TRX) as an international financial centre, describing it as competition with Labuan which operates a similar role.

“Despite Labuan’s status as a federal territory for over four decades, it continues to grapple with ongoing issues related to inconsistent administrative policies, connectivity and the provision of basic utilities like power and water.

“Being thousands of miles away from the central government in Putrajaya, Labuan’s strategic importance is at risk of being overlooked.

“This oversight raises concerns about its future role and positioning within the Malaysia and Borneo region economic landscape,” he said.

Doughty said it was time to review the governance model of Labuan as the changing geopolitical landscape – increasing autonomy and recognition for Sabah and Sarawak – supports the need for this reassessment.

He also suggested that the island could greatly benefit from being part of a special economic zone with a certain amount of autonomy and oversight from federal and Sabah levels.

“This could mirror the governance model of Iskandar Johor, offering the federal and Sabah governments a mutually beneficial path towards sustainable economic development and growth,” he said.