Indonesia’s presence at the Big Sabah Sale (BSS) 2025, a significant consumer product exhibition in Kota Kinabalu, Sabah, represents a calculated move within a rapidly evolving trade corridor. The event, attracting tens of thousands of visitors from fourteen countries, highlights a deliberate strategy to deepen economic ties with East Malaysia and underscores shifting geopolitical dynamics across the Indonesian archipelago. This engagement is not merely about bolstering trade volumes, but about securing access to resources, markets, and crucially, strategic proximity within a region increasingly contested by China and, to a lesser extent, Australia.
The scale of the BSS – 650 booths and significant international participation – is itself a testament to Sabah’s growing economic importance. Sabah, rich in natural resources including palm oil and fisheries, is a crucial component of Malaysia’s Borneo region. Historically, Malaysia’s economic engagement with Borneo, particularly Sabah and Sarawak, has been framed within the context of promoting development and stability. However, Indonesia’s intensified focus suggests a move beyond simply supporting Malaysia; it indicates a recognition of Sabah’s strategic value and an assertive approach to regional influence. The participation of 13 SMEs from diverse Indonesian regions – East Java, South Kalimantan, West Kalimantan, North Kalimantan, DKI Jakarta, North Sumatra, and Bali – directly targets key economic sectors within Sabah, signaling a focused effort to penetrate specific market niches.
The memorandum of understanding (MoU) between KADIN South Kalimantan and MICCI Sabah is a critical element. Such agreements, frequently used in Southeast Asia, are typically aimed at streamlining trade procedures, facilitating business-to-business connections, and reducing barriers to investment. However, the specific details of this agreement – and indeed all similar engagements – are usually shrouded in a degree of ambiguity, making accurate assessment of long-term intent challenging. Yet, the inclusion of ASPINDO North Kalimantan and the Sabah Handicraft Association in discussions regarding border region empowerment demonstrates a broader, more nuanced understanding of the challenges and opportunities presented by Indonesia-Malaysia border areas. This focus on artisanal industries and value-added local products is a deliberate attempt to foster sustainable economic development rather than simply relying on large-scale commodity exports. As Dr. Azwar Anhar, a senior economist at the Institute of Southeast Asian Studies, noted, “The engagement isn’t just about quantity; it’s about the quality of the relationship and the ability to build durable partnerships. Indonesia is demonstrating a willingness to invest in building capacity and fostering genuine collaboration.”
Recent developments further illuminate this dynamic. The Indonesian Consulate General’s commitment to follow-up discussions with Sabah’s local businesses, facilitated by the Indonesian Chamber of Commerce and Industry, is vital. The intention – as stated by the Indonesian Consul General – is to make Indonesian SMEs “export-ready” and capable of competing within the regional market. This suggests an awareness of the logistical and regulatory hurdles that often prevent smaller businesses from successfully accessing international markets, particularly in a region as diverse as Southeast Asia. Furthermore, the increased inquiries regarding long-term distribution partnerships, joint product training, and permanent marketing channels demonstrate a clear intent to establish a sustained presence in Sabah. The pursuit of “export-readiness” is a key component of Indonesia’s broader strategy to diversify its economy and reduce its reliance on commodity exports.
Looking ahead, the next six months will likely see continued engagement between Indonesian and Sabah businesses, primarily focused on solidifying the relationships forged at BSS 2025. The success of this effort will hinge on the ability of both sides to address the logistical and regulatory complexities that often hinder trade. Longer-term, over the next 5-10 years, Indonesia’s engagement with Sabah could significantly impact the broader geopolitical landscape of the Indonesian archipelago. The development of a more robust trade corridor could reduce Indonesia’s dependence on shipping routes through Malacca and Singapore, providing alternative access to key markets. It will also likely intensify competition with China, which has been actively pursuing economic ties with Malaysia and, increasingly, Sabah. The potential for increased Chinese investment and influence in Sabah represents a significant security challenge for Indonesia and underscores the strategic imperative of maintaining a strong economic presence in the region. As Professor Benedict Kramer, an expert on Indonesian foreign policy at the University of Sydney, explains, “Indonesia’s actions in Sabah are a strategic investment, not just an economic one. It’s a demonstration of Indonesia’s ambition to be a dominant force in the Southeast Asian littoral and a key player in shaping regional security dynamics.” The capacity of Indonesia to successfully cultivate this burgeoning trade corridor—and to manage the associated geopolitical competition—will be a crucial test of its regional influence.