LABUAN LIMITED BY CONNECTIVITY ISSUES
But 22 key projects under soon-to-be-announced blueprint will be game changer, lead to greater growth
AS a global and regional centre for international finance and business, Labuan is well-positioned to expand further but continued to be challenged by limitations, mostly by its lack of connectivity.
A bridge linking Labuan island to Menumbok in Sabah via Pulau Daat is on the cards, and is also in a blueprint detailing a roadmap for the city come 2030.
Labuan Corporation deputy chief executive officer Mohd Zamri Mohd Esa said the bridge would be the game-changer for the island.
Construction of Phase One of the Labuan-Sabah bridge is scheduled to begin by 2020.
“The blueprint has been ready (for some time). Now we await the prime minister to launch it, likely sometime this month, after which we can delve into the details of the project,” he told a group of visiting journalists at his office, here.
Labuan enjoys a growth rate of 6.1 per cent, which is stronger than the national gross domestic product (GDP) average. The target is to surpass seven per cent by 2030.
By then, the population would have grown to 150,000, and the GDP per capita is expected to jump to RM94,127 from the RM54,112 recorded in 2015.
“Tourism and education will be among the main growth drivers,” said Zamri, adding that finance and oil and gas supporting services would also be a factor.
To many quarters, including those from the finance, insurance and business services sectors, which contribute more than half of the economic activities of the island, Labuan lacks direct air links or connectivity to other Asian financial centres.
However, the Labuan International Business and Financial Centre is well-positioned as a gateway for connecting investment activities in the region.
Gaps in the finance section have also surfaced. For instance, the island’s Islamic financial business sector remains small, while there are gaps in skills for new recruits in the financial industry, limiting expansion.
“Connectivity must be improved to reduce travelling time,” he said, referring to planned improvements in airport, seaport, ferry and roadway infrastructure.
Limited connectivity also meant the flow of goods and services to and from the island is mostly from Sabah only.
In the area of education, Labuan’s strategic location should see branch campuses of the various public national universities to serve the East Asean Growth Area (BIMP-EAGA) region, and Asean as a whole.
The island also provides the only oil and gas supply base in Sabah and Sarawak. There are currently 200 oil and gas services companies operating on the island.
According to the soon-to-be-announced blueprint, there will be 22 key projects with 52 subcomponents — five quick win (within one year) projects, 23 short-term (within three years) projects and 24 medium- to longterm projects.
Labuan was declared a federal territory in 1984.
In 1990, it was declared an international offshore financial centre.
Infrastructure development is seen as a key driver to unlock Labuan’s potential as an international financial centre.