– State Financial Secretary Dato Sri Dr Wan Lizozman Wan Omar (left) and The World Bank Division Director for the Philippines, Malaysia and Brunei Zafer Mustafaoğlu hold up the signed agreement, witnessed by Abang Johari (second left). – Photo by Chimon Upon

KUCHING (Oct 2): Sarawak is embarking on a comprehensive and far-reaching transformation of State-Owned Enterprises (SOEs) corporate governance policies and practices to effectively deliver development projects, said Datuk Patinggi Tan Sri Abang Johari Tun Openg.

The Premier said a new Sarawak State Ownership Policy, the first of its kind in Malaysia, will be introduced to set clear principles and frameworks for Sarawak’s role as an active, professional and accountable shareholder.

“Through our partnership with the World Bank, we will also establish high-standards of corporate governance across all SOEs, adopting international best practices in areas such as board composition, financial transparency, risk management and integrity frameworks.

“We will develop a centrally-managed and digitally-enabled performance measurement framework to systematically track and assess the performance of our SOEs in relation to their strategic, financial and socio-economic goals.

“These reforms will create world-class SOEs that deliver value, inspire trust and help secure Sarawak’s future,” he said before witnessing the signing of a Reimbursable Advisory Services (RAS) Agreement between the Ministry of Finance Malaysia, the Sarawak Government and the World Bank today.

Abang Johari said this partnership will see Sarawak, together with the World Bank, shaping reforms that can become a model for both Malaysia and the region.

“Through this collaboration, the World Bank will provide critical expertise to help Sarawak strenghten the governance of our SOEs and transform our public financial management systems.

“Reforming our institutions and governance is crucial to realising Sarawak’s vision of becoming a fully developed state by 2030,” he said.

To ensure that Sarawak’s resources are managed efficiently and deployed effectively, he said his administration sought the expertise of the World Bank in reshaping Sarawak’s Public Financial Management so that it will be on par with global best practices.

According to him, the Sarawak Public Financial Management Transformation Programme has two key components, namely the management of fiscal risks and Results-Based Budgeting (RBB) that will ensure that Sarawak not only spends wisely but also safeguards its future against any uncertainties.

RBB links every ringgit spent to clear, measurable outcomes, holding every government department and agency as well as government-linked companies accountable for delivering outcomes agreed within the resources provided, he explained.

He said RBB embeds accountability and performance at all levels of government, ensuring that decisions on resource allocation are based on results rather than inputs.

In parallel, he said Sarawak is also advancing the adoption of the Malaysian Public Sector Accounting Standards (MPSAS) across statutory bodies and local authorities.

He said this will ensure that statutory bodies and local authorities’ financial statements reflect their public mandate and custodial role over state resources, as well as enhance accountability, bring consistency across government reporting, and strengthen confidence in the integrity of Sarawak’s financial information.

“This is why the gradual shift from cash accounting to accrual accounting under MPSAS is so critical. Accrual accounting records revenues when they are earned and expenses when they are incurred. It provides a more complete and transparent view of our financial position, capturing both present commitments and future liabilities.”

To achieve Sarawak’s bold goals and pioneering initiatives, Abang Johari said the state government will rely on its SOEs to play a crucial role in delivering development objectives.

Citing examples, he said Sarawak Metro leads the Kuching Urban Transportation System, Yayasan Sarawak plays a pivotal role in education, Sarawak Energy provides renewable power, Sarawak Economic Development Corporation drives economic growth, and Sarawak Water manages water resources.

“A capable and effective government means (that) our SOEs must also operate under the highest standards of professionalism, transparency and accountability.

“Here in Sarawak, we are committed to a different path. We understand that strengthening corporate governance of our SOEs is not just important – it is an urgent priority,” he added.