With Sabah placing the development of human capital and innovation at the centre of its future wealth creation, health and education have undergone a major boost in recent years. The sectors have also become major targets for investment. All this is being strongly assisted by both the state and federal authorities, which aim to see the private sector take more of a role in these key areas. Major development plans – such as the Sabah Development Corridor (SDC) and the national Economic Transformation Programme (ETP) – have included health and education among sectors for special focus, with incentive schemes available to bring in both local and international outfits and investors.

In Need

The two sectors are not without their challenges, however. Many of these are closely linked to the nature of Sabah itself, which is among Malaysia’s largest states and has a population spread across an often-difficult geography of forests, mountains and rivers. Just getting to school, or a medical centre, can be a major journey, with the health and education sectors in Sabah perhaps more bound up with transport infrastructure development than they are in many other states.

Sabah also faces the challenge of stemming the brain drain. Retaining qualified and experienced educators and medical personnel in the state, despite the bright lights of neighbours like Singapore and Thailand, as well as the peninsula, is vital if a local knowledge-based economy is to be fully developed. Yet Sabah also continues to have much to offer, with its multi-culturalism and strong links to both Western and Eastern pedagogic and medicinal traditions. It also has a unique bio-diversity – a major potential advantage in medical research, as well as in health and wellness tourism.

Education For Development

With around 60% of the state consisting of hilly or mountainous areas, communications and transport among many dispersed rural communities are difficult. Recent times have thus seen a major effort underway to improve the standard of Sabah’s schools. In February 2014 the federal government announced plans to allocate an extra RM1bn ($312.1m) to Sabah for the rebuilding of schools in the state and in neighbouring Sarawak. The federal Education Ministry is also encouraging private sector outfits to become involved in this programme, which will include both new and refurbished school buildings and dormitories, where students from distant villages and long houses can stay during term time.

In addition, the SDC implementation agency, the Sabah Economic Development and Investment Authority (SEDIA), notes in its profile on education in the state that several of the entry point projects (EPP) outlined in the ETP have direct application to Sabah.


The first of these concerns pre-school development, a vital step in setting foundations for education. The Early Child Care Education (ECCE) programme is a key plank. The private sector will be invited to collaborate in the construction of training centres that will provide both in-service and pre-service training for kindergarten teachers and child care providers. Under another EPP, an additional 288 pre-schools are to be constructed in the state. Government support comes with a RM10m ($3.12m) per 1000 student scholarship fund estimated for these training facilities, for the 2012-17 period, with tax exemptions also available to firms donating to this fund. The Kota Kinabalu Chinese Chamber of Commerce and Industry has already expressed interest in constructing a Sabah ECCE. The hope is that some 3500 pre-school teachers and child minders can be trained by 2017.

Training is also the motivation behind a major push on vocational education in the state, with an emphasis on creating a population of graduates well versed in the workings of business, industry and commerce. One area that illustrates this well is Ascot Academy, a private sector college that specialises in training for the hospitality sector. This is another key plank of Sabah’s development programme, with the aim of growing tourism in the state. By 2017 the aim is for Sabah to produce some 29,000 quality graduates in the sector, feeding them into hotels and restaurants in the state.

Technical Education and Vocational Training (TEVT) is also vital for the achievement of another developmental aim for Sabah – the provision of a 15% rise in the skilled workforce in the state by 2020. This represents an additional 45,000 skilled workers, who will achieve this status thanks to a programme of tax incentives for TEVT centres and for private companies working with them. Students will spend more time in the workplace, with industries like agriculture, palm oil, oil and gas, logistics and manufacturing targeted for greater exchanges between the worlds of work and academia.

Focus On ICT & Agriculture

Sabah is also looking to develop information and communications technology (ICT). The Ministry of Resource Development and Information Technology provides mass training programmes for some 40,000-50,000 people a year. A kick-start funding programme for ICT start-ups, Pitch Borneo, formerly known as Sabah Got Ideas, is being funded by the ministry to provide tangible benefits from the training. The Sabah Techno Association also provides a forum for new ideas that can be pitched for funding. The ministry is also behind technorama-iT, which encourages school kids to set up ICT clubs.

In eastern Sabah, the Sandakan Educational Hub (SEH) forms a major part of these education developments. By mid-2014, SEH had already seen its agriculture campus take shape, with Universiti Malaysia Sabah’s (UMS) agriculture faculty, Sabah Polytechnic and Maktab Rendah Sains Mara in place. The hub is also becoming the site of Sandakan Vocational College’s new building. Down the line, there are plans for the Interior Education Hub (IEH), with the Sabah Foundation Yayasan Sabah, YS) set to take a major role here. YS is behind many of the educational institutions in the state, such as Universiti Teknologi Mara Sabah (UTMS), Kolej Yayasan Sabah (KYS), which is currently establishing a university. In addition, University Sabah College Foundation (UCSF), a new and independent school under YS, is focusing on Sabah’s potential in biodiversity and sustainability and human capital development.

“Our South-east Asian culture does play a role in causing children to aim for safe jobs rather than starting their own business. However, Sabah’s unique embrace of cultural differences sets it apart internationally and encourages foreign involvement,” Bruno Vun, permanent-secretary for the Ministry of Resource Development and IT, told OBG.

From Abroad

The state’s education plans also highlight efforts to attract more international students and institutions. Sabah can offer much when it comes to areas of study, such as conservation and environmental management, tropical biology and eco-systems, eco-tourism and hospitality, along with research into the vast bio-diversity of the state and its potential commercial and scientific applications.

Recently, institutions like UMS have also made a special focus on oil and gas industry-related courses. The university recently signed an agreement with TimorLeste to train students in hydrocarbons sector disciplines. China is another major source country for students studying in this area. “Sabah can be a regional champion in oil and gas education, as local production increases,” UMS vice-chancellor Harun Bin Abdullah told OBG. “We are already accepting both students and teachers from abroad seeking education and training in our programmes.”

These measures are also aimed at addressing the increasing costs of funding in education. Public universities across Malaysia have been told to raise more of their own revenue. An emphasis on private sector involvement and the promotion of Sabah abroad as a place to study and do research are consequences of this policy shift. This is also helping breed a more entrepreneurial culture in the colleges, as commercialisation of research also goes up a notch.

Currently, Sabah has one private university, Universiti Terbuka Malaysia; two state universities, UMS and UTMS; two private university colleges, Twintech Sabah and UCSF; two nursing colleges; three public colleges; and 14 private colleges in its tertiary sector. Many international outfits have partnerships and joint programmes.

Health & Wellness

Like the rest of Malaysia, Sabah has both private and public hospitals and medical services. Unlike much of the rest of Malaysia, however, Sabah faces the difficulties of providing care across a large and geographically challenging area, with rural communities often isolated by poor transportation and challenges in ensuring continuous power and water supplies. Sabah also faces the problem of recruiting and retaining qualified and experienced staff, with shortages of nurses and specialists a concern. Nonetheless, Sabah has great potential as a health care centre, particularly for medical tourism, with demand for private facilities also increasing as incomes rise.

The Malaysian Ministry of Health (MoH) is represented in the state by the Sabah State Health Department. The largest public facility is Queen Elizabeth Hospital (QEH) in the state capital, Kota Kinabalu (KK), which now has two sites – QEH I and QEH II. QEH I has been undergoing a major refit and is scheduled to be back at full service by the end of 2014 with 931 beds. QEH II, along with the Sabah Women and Children’s Hospital in the KK suburb of Likas, provide a further 1500 beds.

Under the SDC, the state is also extending and upgrading four hospitals, according to SEDIA, while the authority is also pushing the rollout of full paying patient schemes to boost revenue from medical tourism in state hospitals. The MoH also bought the land and property of the private Sabah Medical Centre (SMC) in 2003, then bought its extension in 2009, before joining with KPJ Healthcare – Malaysia’s largest private health care provider – and creating a space for KPJ to launch the private KPJ Sabah Specialist Hospital.


Another development in the private sphere is the Gleneagles KK hospital, due to begin operating in 2015 with up to 250 beds. Gleneagles, part of the larger Riverson development, and Parkway Pantai, one of Asia’s largest private hospital groups, promises a hospital with five-star hotel standard facilities for patients, meeting the global brand’s requirements. It will also be Sabah’s first high-quality, purpose-built, integrated hospital development, with Joint Commission International accreditation. This has the potential of making it a major focus for health tourism, with the hospital aiming to provide centres of excellence in cardiology, neurosurgery, orthopaedics, gastroenterology and women and children’s care. Gleneagles aims to recruit 80% of its doctors from the state, acting as a magnet to draw Sabahan doctors and nurses back from their jobs in Western Malaysia, the Gulf and Western countries. KPJ, meanwhile, has its own medical university on the peninsula to train staff.

Human resources remain an issue, though, as outlined in statements to the local press in February 2014 by the health minister, who said Sabah needed 600 more doctors, in addition to the around 700 already practicing in the state. Sabah, he added, was considering offering bigger incentives for medical practitioners to work there. Boosting medical training and education in Sabah is also part of the state’s education development plans.

Eyes On The Prize

To be sure, Sabah does offer considerable advantages for health care investment. Indeed, “Sabah has great untapped potential in health care,” Riverson managing director Ben Kong Chung Vui told OBG, “but we must build proper facilities to retain talent and take advantage of our unparalleled connectivity and natural beauty.”

The prize for getting this building process right will likely be the development of the state as an important medical tourism centre, able to take advantage of its good connections with neighbours, while offering a unique, multi-cultural and multi-lingual staff. The state has already developed a good reputation in areas like plastic surgery, and orthopaedics and cardiology are also often highlighted as areas where Sabah can excel.

At the same time, the state’s rising income levels, population numbers and level of urbanisation are creating higher expectations of care, along with more disposable income to afford private health care provision.