Over the years, Sabah and Sarawak have increasingly pushed for greater autonomy and equal partnership within Malaysia, as envisioned under the Malaysia Agreement 1963 (MA63). This momentum has grown, with many in these two East Malaysian states calling for more control over resources, development, and decision-making power. In light of the political landscape following the 2022 general election, these demands have become even more pressing, with Borneo-based parties playing a pivotal role in national governance.
Rising Push for Autonomy and Resource Control
At the heart of Sabah and Sarawak’s demands is the restoration of rights promised under MA63. One of the most prominent demands from Sabah is the return of 40% of its revenue, a long-standing issue that has yet to be fully addressed by the federal government. Sabah has been pushing for this financial entitlement, which it argues is crucial for the state’s development. Despite interim payments being agreed upon until 2026, the full 40% share remains a critical point of contention. Sabahโs Deputy Chief Minister, Jeffrey Kitingan, has highlighted the state’s pressing need for these funds, as it remains Malaysia’s poorest state.
Similarly, Sarawak has been asserting its right over oil and gas resources. In particular, the state has set a deadline of October 1, 2024, for Petronas to relinquish its control over the supervision and trading of gas in the state. Sarawak, which is Malaysia’s largest gas-exporting state, is demanding full authority over its natural resources, with its state-owned Petroleum Sarawak Bhd (Petros) being positioned as the sole aggregator of natural gas. This is a significant move for Sarawak, reflecting its determination to gain full control of its economic resources.
A Key Player in National Politics
The growing calls for autonomy are supported by the unique political standing that Sabah and Sarawak now hold. In recent years, these two states have gained considerable political leverage, with Borneo-based parties holding a substantial number of parliamentary seats. This has been critical for the current unity government under Prime Minister Anwar Ibrahim, who relies on the support of coalitions from Sabah and Sarawak to maintain a stable majority in parliament.
The political influence of these states grew after the 2018 general election when the long-dominant Barisan Nasional (BN) government lost power for the first time. This power shift led to increased importance being placed on securing the support of Borneo-based parties, leading to greater recognition of their demands.
In particular, the call for 35% of parliamentary seats to be reserved for Sabah and Sarawak has gained traction. Currently, the two states hold 25% of the 222 parliamentary seats, but they argue that their larger geographical size and unique status as co-founders of Malaysia justify greater representation.
Economic and Development Disparities
Both Sabah and Sarawak have long argued that they have been left behind in terms of infrastructure and economic development compared to Peninsular Malaysia. Sabah, in particular, has faced ongoing challenges with access to basic services, such as water supply, which has been a source of frustration for residents and students alike. The state capital, Kota Kinabalu, has witnessed protests by university students over water disruptions, reflecting the broader infrastructure issues that plague the state.
The disparity is also evident in budget allocations. In 2024, Sabah and Sarawak received a combined RM12.4 billion in development expenditure, representing only 14% of the national development budget, despite the two states accounting for 60% of Malaysiaโs total land area. This imbalance has fueled calls for greater control over state resources, including oil royalties and tax revenues.
The Role of MA63 and Federal-State Negotiations
Prime Minister Anwar Ibrahim has committed to addressing the demands of Sabah and Sarawak under MA63, and progress has been made. Deputy Prime Minister Fadillah Yusof, who is also from Sarawak, has played a key role in overseeing the implementation of MA63-related issues. To date, 11 demands made by Sabah and Sarawak have been resolved, including the handover of regulatory power over gas supply and the appointment of state representatives to the Inland Revenue Board.
However, challenges remain, particularly in relation to revenue-sharing, oil royalties, and the allocation of parliamentary seats. These issues are complex, involving intricate legal and constitutional considerations, which is why negotiations have been protracted. While some progress has been made, both Sabah and Sarawak believe that there is still a long way to go before their rights are fully restored.
Conclusion: A New Chapter for Sabah and Sarawak
As Sabah and Sarawak continue to assert their rights under MA63, their push for autonomy reflects a broader shift in Malaysiaโs political and economic landscape. Both states are demanding greater control over their resources and development, as well as a more significant role in national decision-making.
While the road to full implementation of MA63 is fraught with challenges, the increasing political leverage of Sabah and Sarawak, coupled with their strong economic contributions, ensures that their demands will remain at the forefront of Malaysiaโs national agenda. As these Borneo states push for greater autonomy, the future of Malaysiaโs federation will depend on how well the federal government can balance the needs and aspirations of all its regions.
