The Malaysian state of Sarawak has made quick progress toward implementing results-based budgeting (RBB) – matching budget allocations with agreed-upon, tangible outcomes. Supported by the Financial Management Umbrella Program (FMUP) the state is on track to replace a line-item budgeting system that had been based on relatively arbitrary year-to-year increments.
Work geared up after the Sarawak State Cabinet approved an RBB Policy Circular in April 2024, which detailed the concepts, principles, and other fundamentals of the new budgeting approach. The RBB Circular was informed by technical inputs from the FMUP-funded World Bank team in Sarawak.
This year has been one of building the RBB framework, awareness-raising for top management, and government-wide training for officials, reaching more than 200. It is all driving toward 2026 implementation of RBB, drawing on manuals and technical guidelines developed under the FMUP initiative. As part of the training and orientation process, all ministries and programs were guided in developing an inaugural results framework and a performance monitoring plan. They were also required to report performance for the last two quarters of 2025.
“The World Bank’s support has transformed the way Sarawak approaches budgeting and fiscal management, laying a foundation for more responsible and effective governance as well as changing the mindset of the officers in managing state financial resources,” said Dato Sri Dr. Wan Lizozman bin Wan Omar,” Sarawak’s State Financial Secretary. “This transformation is expected to lead to better service delivery and enhanced public sector performance.”
RBB ensures that all government policies are citizen centric and viewed as priorities that must be funded. It also significantly improves governance, accountability and transparency, enabling citizens to better track and assess government spending decisions. Aspects of the RBB approach are commonly used by Organisation for Economic Cooperation and Development (OECD) countries.
Prior to RBB, links between policy, planning, and budgeting was weak, and appropriations were traditionally incremental and line-item based. Additionally, performance monitoring and reporting was weak and not linked directly to the planning framework.
The RBB initiative is central to a broader effort by the state to reform public financial management systems overall. A companion FMUP-supported initiative in Sarawak focused on state-owned enterprises, a critical element of another reform strategy currently in process.
Watch the video above to learn more about how RBB works and about Sarawak’s experience with it.