Malaysia’s 2026 budget signals renewed focus on eastern states

Announced just days after the Sabah state assembly was dissolved, Malaysia’s Budget 2026 signals a renewed focus on East Malaysia, with major spending on infrastructure, electricity and water in a region vital to the country’s political and economic balance.

- Muzliza Mustafa Malaysia Correspondent

Analysts say the timing underscores Sabah’s weight as it heads into a state election, amid lingering public distrust over the long-delayed delivery of federal promises to the resource-rich but less developed eastern states.

Budget 2026 raises Sabah’s development funding to RM6.9 billion (S$2.1 billion) and Sarawak’s to RM6 billion. It also doubles both states’ annual special grants to RM600 million each from RM300 million previously.

For many Sabahans, though, promises of large allocations have become too familiar, with little to show for them.

Dr Arnold Puyok, political analyst at Universiti Malaysia Sarawak, said voters are looking for results, not figures.

“People here have heard promises of billions before, yet infrastructure problems remain. The main issues are implementation, weak governance and the inability of representatives to turn those billions into tangible results,” he said.

Dr Puyok said that while the higher grants are significant, they do not resolve Sabah’s long-running demand for a bigger share of federal revenue.

“It does not address the issue of the 40 per cent federal revenue that Sabah has been demanding. This is only a temporary and symbolic solution, rather than a long-term and structural one,” he told The Sunday Times.

Opposition MP Syahir Sulaiman of Parti Islam SeMalaysia in Bachok, Kelantan, described the allocations as pre-election goodies, arguing that federal funds should not be used as political leverage. “Sabah and Sarawak deserve more support, but development allocations should not be tied to political timing or convenience,” he said.