Sarawak Unveils More than Twelve Billion RM Budget 2026 to Boost their Development Modern Agriculture Tourism Assets Growth and Launch Carbon Levy for the Net Zero Goals of Malaysia

Published on November 24, 2025

The Budget 2026 for the state of Sarawak in Malaysia stands at RM12.91 billion, with an operating expenditure of RM5.6 billion and RM7.3 billion development spending. Unveiled by Sarawak Premier Tan Sri Abang Johari Tun Openg, the Budget 2026 mirrors an expansionary yet disciplined fiscal policy to underpin growth, infrastructure investment, and resilience in the years to come.

With projected revenue of RM13.05 billion, Sarawak is anticipating a surplus of RM144 million, indicating that it remains committed to prudent financial management. This surplus also leaves room for the state to confidently invest in sectors that will improve Malaysia’s regional competitiveness, including tourism, agriculture, digital infrastructure, and climate action.

Operating Expenditure Underpins Core Services And Stability

Out of the RM5.6 billion operating budget, about RM1.4 billion, or 25 per cent, has been reserved for personnel emoluments, ensuring that public servants across Sarawak Malaysia continue to deliver essential services. This supports the functioning of healthcare, education, security and administrative systems that indirectly influence the quality of the visitor experience for tourists.

Additionally, RM99 million has been set aside for asset procurement, while RM150 million is allocated to other operating expenses, giving the state room to manage day-to-day priorities and respond to emerging needs. Stable governance and reliable public services form an important foundation for tourism confidence and destination attractiveness in Malaysia. A further RM2.2 billion is allocated to supplies and services, maintaining government operations and service delivery. Around RM1.8 billion is dedicated to grants and fixed payments, including support for statutory bodies, local authorities, public debt servicing, pensions, gratuities and scholarships, reinforcing social and institutional stability.

Modern Agriculture As A Growth Engine With Links To Food Tourism

A central strategic thrust of the 2026 Sarawak Malaysia Budget is the transformation and diversification of the agriculture-based economy, which remains a key driver of state development and now stands as the fourth largest contributor to Sarawak’s GDP. To accelerate modernisation, RM73 million has been earmarked for the adoption of advanced technologies across the agricultural supply chain. This focus on smart agriculture not only boosts productivity and incomes for rural communities but also strengthens food security and creates new opportunities for agro-tourism and culinary tourism in Malaysia.

Within this allocation, RM19.5 million is directed to the Sarawak Agrotechnology Park in Semenggok and Tarat, which will act as innovation hubs for high-value crops, research and technology adoption. Another RM27.5 million supports precision farming parks in Kabuloh, Sungai Sebiew and Rampangi, enabling data-driven farming and more efficient use of land and resources. The Metropolitan Food Cluster in Opar receives RM20 million to strengthen urban-linked food production and processing, enhancing the supply of fresh, local produce that can underpin gastronomy tourism.

Meanwhile, RM5.9 million will fund the implementation of Internet of Things systems in agriculture and aquaculture, allowing farmers and fishery operators to monitor conditions in real time, reduce waste and improve yields. These initiatives support farm visits, educational tours and food experiences that can draw both domestic and international tourists to Sarawak and Malaysia.

Tourism Culture And Creative Economy Get Significant Boost

The tourism and cultural sectors receive a strong push under the 2026 budget, aligned with Malaysia’s broader tourism strategy to attract more visitors and diversify experiences. A total of RM129 million has been allocated to transform and enhance key tourism and cultural assets across Sarawak. This includes converting the old legislative assembly building into a performing arts centre, which is expected to host festivals, concerts and cultural showcases, reinforcing Sarawak’s identity as a vibrant cultural destination within Malaysia.

The Kuching City South swimming pool will be redeveloped into a water fun park and a UNESCO Creative City of Gastronomy hub, elevating Kuching’s food credentials and providing new family-friendly attractions. Funding will also support Sadong Jaya Mangrove Tourism, promoting eco-tourism rooted in mangrove ecosystems, and several museum projects that highlight Sarawak’s history, indigenous cultures and natural heritage. These investments expand the range of experiences offered to tourists, encourage longer stays and help position Sarawak Malaysia as a distinctive destination within Southeast Asia.

Budget Theme Connects People Prosperity Resilience And Tourism Appeal

The 2026 Sarawak Budget, with its theme Empowering People Advancing Prosperity Building A Resilient Future, is framed as a strategic and expansionary plan anchored in revenue re-engineering and careful financial stewardship. By prioritising infrastructure, digital transformation, sustainable development and community wellbeing, the budget strengthens the factors that underpin tourism competitiveness. Improved roads, reliable utilities, enhanced digital connectivity and resilient communities all contribute to a more welcoming, safe and accessible environment for visitors to Sarawak Malaysia.

Carbon Levy Strengthens Climate Leadership And Green Tourism Positioning

The levy will apply to emissions generated within Sarawak by regulated facilities in those sectors. Funds collected will be channelled into a dedicated Climate Change Fund, supporting renewable energy deployment, energy efficiency upgrades, grid modernisation, forest conservation and climate-resilience initiatives for communities. These actions not only reduce carbon footprints but also strengthen Sarawak’s image as a responsible, forward-looking destination for eco-conscious tourists. Clean energy, protected forests and climate-resilient infrastructure are increasingly important to travellers who seek sustainable tourism choices in Malaysia.

Climate Framework Supports Domestic Carbon Market And Green Investment

The Carbon Levy, therefore, draws its legal basis from the Environmental Reduction of Greenhouse Gases Ordinance 2023, as Sarawak balances its proactive stance in climate policy with economic growth and fiscal responsibility. Measurement, reporting, and verification systems have already been developed by the state, with advanced modelling done and detailed policy design, and are well-positioned to support Malaysia’s decarbonization commitments and nationally determined contributions.

Sarawak is ready to work closely with the federal government in order to harmonize the carbon tax and carbon pricing frameworks, so as to establish a more robust domestic carbon market that attracts green investment, supports conservation and further enhances eco-tourism credentials. As the carbon levy becomes a sustainable revenue source, fiscal policy is aligned with environmental responsibility, and Sarawak Malaysia is cemented as a destination where natural assets are protected, communities benefit from climate action, and visitors can experience both development and biodiversity in an environmentally responsible manner.