The government today launched a major development project to spur growth in Sabah on Borneo island, which is resource-rich but lags behind the rest of the nation.

The economic masterplan, which aims to bring some RM105 billion in investment, is the fourth in a series of five designed to spur investment in Malaysia's regions.

Prime Minister Abdullah Ahmad Badawi said in the state capital Kota Kinabalu that the Sabah Development Corridor initiative is aimed at eradicating poverty there by 2025.

He said the 18-year project would transform Sabah by encouraging tourism, trade and investment, and promoting it as a "technology-savvy" region.

"Sabah, with its natural resources, has immense potential given by Allah and should be exploited so that the people do not live in poverty," he said according to the state Bernama news agency.

The initiative aims to create 900,000 new jobs over its 18-year span, and boost tourism receipts from RM2.88 billion in 2006 to RM8 billion by 2012.

Most of the targeted investment is to come from the private sector, but the government has kicked in an initial RM5 billion.

Sabah has a large number of tourist attractions including Southeast Asia's highest peak Mt Kinabalu, orangutan sanctuaries and the world-famous Sipadan diving resort.

Master plans in peninsular Malaysia

It is also rich in oil and gas, and has vast oil palm plantations and logging concessions.

The government, which is gearing up for general election expected to be held in March, has already launched three big-spending master plans for peninsular Malaysia.

The Eastern Coast Economic Corridor (ECER), is a 12-year plan designed to attract 33 billion dollars worth of investment for predominantly rural states.

The 51 billion dollar Northern Corridor Economic Region master plan is focused on rejuvenating the northern states of Perlis, Kedah, Penang and Perak over the next 18 years.

And the Iskandar Development Region in southern Johor state aims to capitalise on its proximity with neighbouring Singapore and turn the region into a new Asian metropolis.

The remaining development plan is for Sarawak state, which is also on Malaysia's half of Borneo island which it shares with Indonesia.