James Chin on MA63 and the Return of State Nationalism in Malaysia

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James Chin on MA63 and the Return of State Nationalism in Malaysia

Calls for increased autonomy for Sabah and Sarawak are once again on the agenda in Malaysian politics.

James Chin on MA63 and the Return of State Nationalism in Malaysia

The Sarawak State Assembly building in Kuching, Malaysia.

Credit: Wikimedia Commons/CEphoto, Uwe Aranas

Since the founding of the Federation of Malaysia in 1963, the nation’s politicians have grappled with the relationship between Sabah and Sarawak, the two states on the island of Borneo, with the federal government in Kuala Lumpur. At the heart of this issue is the Malaysia Agreement of 1963, or MA63 for short, which set the terms under which Sabah, Sarawak, and Singapore would come together with Malaya to form the Federation. (Singapore would later leave in 1965.)

In the decades since, the autonomy granted to these regions by MA63 has been slowly diluted, creating resentments about overbearing federal authority. Since the shock election victory of the opposition Pakatan Harapan coalition in 2018, however, the cause of autonomy for Sabah and Sarawak is once again on the agenda, and gaining momentum.

The Diplomat’s Southeast Asia Editor Sebastian Strangio spoke with James Chin, a professor of Asian studies at the University of Tasmania and a senior fellow at Jeffrey Cheah Institute in Malaysia, about the legacy of MA63, how the question of autonomy continues to resonate in eastern Malaysia, and recent steps toward increased autonomy for Sabah and Sarawak. Chin is a specialist in Malaysian politics and a leading authority on Sabah and Sarawak politics.

For readers who are unfamiliar with it, what is MA63, what was its purpose, and in what ways was it important for Sabah and Sarawak?

The Malaysia Agreement, formally the “Agreement Relating to Malaysia between United Kingdom of Great Britain and Northern Ireland, Federation of Malaya, North Borneo, Sarawak, and Singapore,” was the legal agreement signed in July 1963 which combined North Borneo (now called Sabah), Sarawak, and Singapore with the existing states of the Federation of Malaya, the resulting union being called the Federation of Malaysia.

It is important for Sabah and Sarawak because it lays out the conditions in which the federation of Malaysia was established. In particular, it gave Sabah and Sarawak a high degree of autonomy in the new Federation. For example, these two states were given control of immigration, thus a Malaysian citizen from outside these states can be denied entry.

The autonomy of the eastern Malaysian provinces has been considerably diluted in the decades since MA63. What was the main driver of this trend, and what have been some of the major impacts for the two regions?

There were basically two major drivers:

First, in the first two decades of independence, the state governments of Sabah and Sarawak were allies and later formal members of the federal coalition, the Barisan Nasional (BN). Thus, when the federal government decided to centralize powers, they did not face much opposition from the state governments. Related to this is the apathy and incompetence of the political leaders from both states. Every time the federal government changed the regulations or rules to take away autonomy from the state, the leaders agreed to it because they simply did not understand or, more likely, did not dare to confront the federal leaders.

Second, in the case of Sabah, the federal government was worried about the rise of indigenous KadazanDusun nationalism, and thus, decided to intervene directly in Sabah politics to ensure there was a pro-federal state government. On top of this, Mahathir, when he was prime minister the first time around (1981-2003), allowed a covert operation to dramatically increase the number of Muslim citizens. This was done by illegally giving Moro and Indonesian Muslims Malaysian citizenship. So now, at least a quarter of Sabah’s population are non-Sabah-born Muslim citizens.

In neighboring Sarawak, the federal government intervened to ensure that Melanau Muslims were always in power and remain on the side of the federal government. Political leaders from Sabah and Sarawak never really confronted the federal leaders over the loss of autonomy or moves by the federal government to centralize powers. Until 2008, the United Malays National Organisation (UMNO), the main party in the BN coalition, was all-powerful and the state leaders in Sabah and Sarawak wanted a cozy relationship with UMNO.

The major impacts have been as follows:

First, in Sabah, as mentioned, the federal government altered permanently the population of the state and changed its character forever. From the 1990s onward, it became impossible for the indigenous KadazanDusun people to take power, because the Muslim voters became the majority in Sabah. The majority of KadazanDusun people are Roman Catholic and the federal government’s open support for the Muslims meant there were some prejudices faced by the Church and the wider Christian community. One of the safeguards of MA63 was that there was supposed to be no official religion in Sabah and Sarawak. But Sabah’s constitution was amended in 1973 to make Islam the official religion.

Second, in the case of Sarawak, the strong federal government is a major factor in allowing one Melanau family to hold the chief minister’s office from 1970 to 2014, a period of more than four decades. This family still indirectly holds some of the key levers of power in Sarawak. The most important point is that the long period under one family allowed the family to build one of the biggest conglomerates in Sarawak and the private wealth of this family runs into the billions of dollars. Yet this is all relatively unknown outside Malaysia.

The third impact has been the underdevelopment of both states. Sabah and Sarawak remain two of the poorest states in the federation, especially when it comes to basic infrastructure. For example, there is no highway linking both states, while in Malaya the highway linking Thailand all the way to Singapore (the North-South Highway) was built in the 1980s. The two states are currently trying to build a pan-Borneo highway, but it will only be probably ready in 2024. There are many parts of the interior of Sarawak and some parts of Sabah where there is no national power grid, and electricity is provided by portable generators.

Can you explain the reasons why autonomy for these regions is once again on the agenda in Malaysia? What do you think are the most significant recent developments?

In 2008, UMNO nearly lost power at the federal level but for MPs from Borneo. Without the MPs from Borneo, UMNO would have lost the federal government. This was the catalyst for many MA63 activists from both states to campaign for greater autonomy. The most significant weapon was social media. For the first time, they were able to reach a wide audience in Sabah and Sarawak and lay out their historical grievances. Many younger Sabahans and Sarawakians had no idea about MA63, nor that these two states were different politically from other states in the federation. They discovered that Sabah and Sarawak were marginalized in the federal system and that the promises of autonomy were not kept by the federal government. Now a whole new generation of young people are angry, vocal, and want Sabah and Sarawak to have full autonomy within the federation.

The most significant development is the acknowledgement by the federal government that it must address the historical grievances related to MA63. When the Pakatan Harapan (PH) coalition took power in 2018, it established a federal-level committee to decentralized powers back to Sabah and Sarawak. When PH fell from power in 2020, the new Perikatan Nasional (PN) administration also established a committee to deal with these regional grievances. In fact, the new PN administration appointed a Minister for Sabah and Sarawak affairs under the PM’s department.

It is important to note that the federal government’s moves to establish these high-level committee are not due to their understanding of the historical grievances, but they are worried politically that if they are not seen to be doing anything, this will encourage a secessionist movement. There are already secessionist movements in Sabah and Sarawak, but they are still small and largely confined to urban areas.

When the voters of Sabah went to the polls for state elections in September, a majority of them voted for allies of Prime Minister Muhyiddin Yassin, rejecting the incumbent Warisan Plus government, which ran on a “Sabah for Sabahans” platform. You noted at the time that Warisan’s pro-autonomy pitch seems to have been trumped by their opponents’ promise of increased economic aid from Kuala Lumpur amid the COVID-19 pandemic. What do you think this says about the longer-term outlook for Sabah’s autonomy?

I am not sure this is correct. PM Muhyiddin’s BN-GRS group won 28 seats, a one seat majority. But if you look at the popular vote, Warisan Plus led BN-GRS by about 2,000 votes. Thus, I would argue that “Sabah for Sabahans” is still potent politically although massive economic aid and vote-buying will have an impact.

Sarawak is similarly scheduled to go to the polls in August to elect a new state government. Assuming the election is not postponed due to COVID-19, how do you think separatist sentiment might manifest itself in this election campaign?

In Sarawak, there are at least two political parties openly raising the issue of secession from the federation: Parti Bumi Kenyalang and Parti Aspirasi. But these two parties are relatively small and will probably not win any seats in the upcoming election. If they were making inroads, Malaysia’s Special Branch would have already arrested the party leaders.

Among the major parties contesting, all of them have maximum autonomy in their manifesto. Thus, the flame of MA63 state nationalism is as strong as ever.

Do you hold out any hope of a “restoration” of MA63, or its guarantees of autonomy for Sabah and Sarawak?

I have no doubt that some symbolic recognition will be forthcoming. For example, the federal government will probably amend the Federal Constitution to recognize Sabah and Sarawak as separate from the other 11 states in Malaya, and also insert the words “pursuant to the Malaysia Agreement 1963” or similar language in certain parts of the Constitution to reflect the extra constitutional safeguards enjoyed by Sabah and Sarawak. Additional wordings are acceptable to the Malay political class in Malaya if they have no long-term financial implications other than some ambiguous political symbolism.

However, one key item will probably remain unresolved. Among the state nationalists, they want the federal government to amend or scrap the Petroleum Development Act (PDA 1974). Under the PDA, all oil and gas found belongs to the federal government. Activists want the oil and gas resources returned to the state, claiming that it is oil and gas money from Sabah and Sarawak that has largely paid for Malaya’s rapid development over the past four decades. They claim that taking back control also means billions will be available to develop the two states.

The Malayan political class and the federal government absolutely reject this view. Their basic argument is that extraordinary wealth from individual states must be shared across the federation, otherwise there is no federal system. Moreover, for the past four decades, almost all the development part of the Malaysian budget is paid by dividends from Petronas, the state-owned company created by PDA 1974. Thus, for practical and philosophical reasons, the federal government is very unlikely to hand over control of oil and gas back to Sabah and Sarawak.