Forestry Corporatization: SOE in Sarawak

Themes: Economic Growth | Environmental Sustainability | Private Sector Development

Guinness Gallagher, in association with a government owned scientific research institute (NZ Forest Research Institute, now named Scion) and PWC Malaysia, fielded a team of legal, banking, forestry, engineering and marketing experts and undertook an in-depth review of the Sarawak Forestry Department and its operations to identify options for increasing the economic value and improving efficiency of the Sarawak forestry industry across the whole “value-chain” from the forest floor to the marketing and sale of trees and value added forestry products.

Our team undertook and completed extensive fieldwork in Sarawak and prepared a report and implementation plan for the conversion of the government department into a state owned corporation that had the flexibility and capacity to meet the rapidly changing requirements of sustainable harvesting.

At the time of the review, the Forestry Department in Sarawak was the state’s principal revenue earner with royalty payments generating in excess of 1 billion US$ per annum to the Sarawak state revenues.

While the implementation process of the corporatization was frozen as a result of the 1997 Asian Financial Crisis, Guinness Gallagher and NZFRI was awarded a prestigious TRADNZ Export award for the quality of its international consulting services under this project by the New Zealand Government.

The themes and sectors covered by this project were as follows: -

Theme Sub-Theme
Economic Growth - Developing rural areas
  - Knowledge, science and technological capacities
  - Promoting economic efficiency and enabling business environment
  - Promoting macroeconomic stability
  - Widening access to markets and economic activities
Environmental Sustainability - Eco-efficiency
  - Environmental policy and legislation
  - Global and regional trans-boundary environmental Issues
  - Natural resource conservation
Private Sector Development - Private sector investment
  - Privatization
  - Public Private Partnerships
Sector Sub-Sector
Agriculture, natural resources, rural development - Agriculture policy, institutional and capacity development
  - Agriculture production
  - Agriculture research and application
  - Agro-industry marketing and trade
Education - Technical and vocational education and training
  - Tertiary
Public Sector Management - Public expenditure and fiscal management
Transport - Multimodal logistics
  - Road transport (non-urban)
  - Transport policies and institutional development
  - Water transport (non-urban)