Article Outline Economy. Sabah Sabah is the second largest state in Malaysia. It lies on the northeastern part of the island of Borneo. Sabah is mainly rural, with large areas of forests and mountains.
Most people live in towns and in small villages.
Its capital is Kota Kinabalu. There are 30 separate ethnic groups of people in Sabah. The largest are the Kadazans, Bajaus, and Muruts. Smaller groups include the Bisayah, Orang Sungei, Kedayan, Idahan, Rangus, Tidong, Suluk, and Brunei. Each group lives in specific districts and has its own religion, language, and dress.