Malaysia unveils Borneo growth plan as polls loom

KUALA LUMPUR, Jan 29 (Reuters) - Malaysia unveiled a $32.4 billion development plan on Tuesday for its eastern state of Sabah, on Borneo island, as the nation geared up for general elections widely expected by end-March.

Prime Minister Abdullah Ahmad Badawi gave no spending details in unveiling the 18-year plan in Sabah, but he is putting economic development on top of his agenda as he tries to counter his waning popularity and secure another five-year mandate.

"It is not the intention of God that you should live in poverty and become backward," Abdullah said in launching the Sabah Development Corridor, the latest in a series of growth corridors that are becoming the trademark of his economic model.

"Sabah is endowed by God... We shall not leave it untouched," he said in a ceremony that was opened by traditional Borneo dancers wearing feathered headresses and wielding blow-pipes.

Sabah, one of the two Malaysian states on Borneo Island, is rich in natural resources such as oil, natural gas, timber, palm oil and cocoa. But the wealth is not evenly distributed and the state is still home to some of Malaysia's hardcore poor.

In his speech, Abdullah said only that the government planned to spend about 5 billion ringgit ($1.54 billion) in the state, and this amount was already budgeted for in the Ninth Malaysia Plan, a five-year national development agenda announced in 2006.

But a public-relations firm hired by the government to promote the Sabah plan said later that it called for a total of 105 billion ringgit ($32.4 billion) in state and private investment over 18 years. The firm did not give a breakdown.

Over the 18 years, the government also hopes to create 900,000 jobs, boost manufacturing investments by more than 10-fold, and grow the state economy by four-fold.

Agriculture, food production and tourism are key focus areas, with some of the funds earmarked to build roads.