Part 2: Sabah is resource-rich — but are we logistics-rich?
KOTA KINABALU: Sabah has never lacked resources. We have palm oil, petroleum and gas, timber, fisheries, agricultural land, biodiversity and remarkable tourism assets. Our geographical position also places us in a dynamic region encompassing Borneo and the wider East Asian markets.
On paper, this is an impressive economic inheritance.
Yet an uncomfortable question deserves to be asked: if Sabah is so resource-rich, why does this not automatically translate into equally strong economic value, higher incomes and broader opportunities for our people?
Perhaps part of the answer lies in how we think about wealth.
Possessing resources is one thing. Having the capability to move, process, connect and market them efficiently is another.
This is where logistics enters the economic story.
Resources are only the beginning
A fish in the sea has biological value. Once caught, landed, chilled, processed, packaged and delivered to a premium market, it acquires much greater economic value.
The same applies to agriculture. A fruit grown in a rural district has limited commercial value if the farmer cannot move it quickly and economically to a collection centre, processor, supermarket, airport or export market.
Palm oil provides another example. Producing crude palm oil generates economic activity, but additional value can potentially be created through refining, downstream manufacturing, specialised products, packaging, distribution and supporting services.
This leads to an important distinction:
Being resource-rich describes what we have. Being logistics-rich describes what we can do with what we have.
The difference can determine how much value remains within Sabah.
The journey from resource to value
We normally describe an economy in sectors — agriculture, manufacturing, tourism, construction and services.
Look at the same economy through a logistics lens and another picture emerges.
Every product undertakes a journey:
Resource → production → processing → distribution → market
At every stage, value can either be added or lost.
Poor connectivity increases cost. Delays reduce competitiveness. Inadequate cold chains shorten shelf life. Fragmented cargo volumes make transportation expensive. Unreliable services complicate business planning. Limited processing can mean products leave Sabah before much of their potential value has been captured locally.
The important question, therefore, is not simply how much Sabah produces, but how much value Sabah retains from what it produces.
What does logistics-rich mean?
Being logistics-rich does not simply mean having more trucks, larger ports or more warehouses.
A logistics-rich economy possesses the connections, capabilities, and coordination that enable goods, people, information, and services to move efficiently.
A road becomes economically productive when it connects farmers with collection centres and markets. A port becomes more valuable when connected to industries, warehousing, efficient clearance processes and shipping networks. An airport becomes an economic gateway when it supports tourism and facilitates the movement of high-value, time-sensitive goods.
The real infrastructure of logistics, therefore, is not any single facility.
It is the network connecting them.
This distinction is particularly important for Sabah because our economic activities are spread across a large territory. Production areas can be far from processing centres and major markets, while rural communities experience very different levels of accessibility.
We cannot change geography, but we can change its economic consequences.
Better connectivity reduces travel time. Cargo consolidation can lower unit costs. Cold chains extend market reach. Efficient ports improve reliability. Digitalisation can reduce paperwork and uncertainty.
Good logistics effectively shortens economic distance, even when physical distance remains unchanged.
The missing middle of development
Development discussions frequently concentrate on two ends of the economic chain.
At one end, we discuss production — increasing agricultural output, attracting investment, expanding tourism or developing industries. At the other, we discuss markets and exports.
Between them lies what we might call the missing middle.
It includes collection, transportation, storage, consolidation, processing, packaging, warehousing, documentation, distribution and information.
If this middle is weak, increasing production alone may not generate the expected prosperity.
A farmer can produce more but gain little if transport costs absorb the additional income. A fisherman can increase his catch but remain excluded from premium markets without reliable cold chains. A manufacturer may be competitive at the factory gate but become less competitive once logistics costs are included.
This is why logistics should not be considered only after economic policies have been formulated.
Logistics itself must become part of economic policy.
Moving beyond commodities
Sabah’s longer-term ambition should therefore extend beyond becoming more efficient at moving commodities out of the state.
The greater opportunity lies in using logistics to support value creation in Sabah.
Where commercially viable, resources should connect with processing, manufacturing, packaging, distribution, technology and supporting services before reaching wider markets.
This does not mean everything must be processed locally. Economic and commercial realities must determine what makes sense.
But for every important Sabah resource, we should ask:
Where along this supply chain is value being created — and how much of that value can Sabah competitively retain?
That question connects logistics directly with industrialisation, rural development, employment, investment and household income.
Becoming value-rich
Sabah’s natural resources remain an enormous advantage. But resources alone cannot guarantee prosperity.
Our next stage of development requires us to be equally ambitious about the systems that connect those resources to markets and economic opportunities.
This requires looking beyond individual roads, ports, airports, and industrial estates to see them as components of one interconnected economic network.
The objective is not simply to move more cargo. It is to move Sabah further up the value chain.
Perhaps the better measure of our future success is therefore not merely how much palm oil we produce, how many tonnes of fish we land or how many resources we possess.
It is the amount of economic value Sabah retains after those resources enter the supply chain.
Sabah is unquestionably resource-rich.
The challenge now is to become logistics-rich — and ultimately, value-rich.
