Borneo states push Malaysia’s Anwar for greater autonomy

Activists and leaders from Malaysia’s oil-rich states on Borneo island have been ratcheting up demands for greater autonomy and funding under a six-decade-old agreement tied to the nation’s founding.

They say guarantees enshrined in the 1963 Malaysia Agreement that promised the people of Sabah and Sarawak greater control over oil and gas revenue, and freedom to shape some policies within their borders, haven’t been met.  

In early September, Sarawak Premier Abang Johari Openg said the push to control resources was not just about economics, but sovereignty and identity as well.

“Sarawak is not overstepping its boundaries; we are merely exercising powers already granted by the constitution,” Abang Johari told state-news agency Bernama.

“Our management of oil and gas is part of our constitutionally recognized rights. This is an affirmation of Sarawak’s autonomy within the framework of the federation, not a deviation.”

Prime Minister Anwar Ibrahim, meanwhile, has been trying to make good on a pledge during the 2022 electoral campaign to solve the impasse with the Borneo states. He came to power that year through a coalition that included MPs from both Sabah and Sarawak.

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The agreement led to the formation of the nation by uniting the Federation of Malaya with Sabah, Sarawak and Singapore, and promising the Borneo states a unique status within the federation. In 1965, Singapore broke away to become its own country.

Sabah and Sarawak were to have control over their natural resources such as oil and timber, immigration and financial matters, as well as education. The most contentious of these are about oil royalties and control over the continental shelf, issues that strike at the core of the states’ financial autonomy.

Jayum Anak Jawan, a political science professor at the Institute of Borneo Studies, said the demands from the two states were not out of the blue.

“Sabah and Sarawak are simply demanding the honoring of the Malaysia Agreement that was conveniently disregarded by all Malayan prime ministers before Anwar Ibrahim.

“Borneo assertiveness is merely wanting the federal government to honor what the forbears had agreed to when they came together forming the Federation of Malaysia. Thus, Sabah and Sarawak are not asking for anything outside those which the forefathers of Malaysia had agreed upon,” Jayum told BenarNews.

Jeffrey Kitingan, Sabah’s deputy chief minister, said the most critical aspect of the agreement that must be addressed is the financial rights due to his state. 

“The federal government has not honored the 40% revenue share owed to Sabah. They know the figures but refuse to allocate our rightful portion,” he said.

“Some argue that restoring this share might strain Malaysia’s finances, which tells us how much revenue is derived from Sabah. Are we supporting the nation while receiving only crumbs in return?”

He also pointed to other neglected financial entitlements, such as 10% export duties on petroleum from national oil company Petronas and 10% import duties on petroleum products. 

“These are rights enshrined in the constitution, and ignoring them constitutes a breach of the federal government’s constitutional obligations,” Jeffrey said.

Coalition

After the 2022 general election, Anwar created a coalition with a former rival party, the United Malay National Organization, joined by political parties from the Borneo states (Sabah and Sarawak). He appointed Ahmad Zahid Hamidi of UMNO and Fadillah Yusof from Sarawak Party Coalition as his deputies and tasked Fadillah with overseeing matters related to the agreement.

Despite Fadillah’s recent announcement that at least 11 agreement-related demands ranging from gas supply issues to representation on the Inland Revenue Board have been resolved, key demands remain unmet. 

A complete list of the 21 demands has not been publicly released and previous negotiations on these issues have been classified under the Official Secrets Act. 

Jeffrey, Sabah’s deputy chief minister, acknowledged the resolved demands but noted many crucial elements have not been addressed.

“The implementation has been excruciatingly slow,” Jeffrey said in a statement released to BenarNews. “Despite the prime minister’s pledge for swift action, significant delays persist due to a lack of political will and the structural challenges within the federal government.”

Destabilization fears

Analysts caution that the Borneo states’ push to reclaim the rights promised under the agreement and Anwar’s failure to address all the demands could destabilize his fragile coalition.

“The federal government and Malayan leadership are currently at their weakest,” analyst Jayum said.

“Anwar’s coalition needs the support of Sabah and Sarawak to maintain its hold on power.”

For Anwar, the stakes are incredibly high, according to Ahmad Mohsein Azman, an analyst at BowerGroupAsia, a political risk consultancy firm.

“Sabah and Sarawak are significantly stronger now than they were 10 years ago. The splitting of their political parties from Barisan Nasional and the formation of blocs such as GPS (Gabungan Parti Sarawak) and GRS (Gabungan Rakyat Sabah) has solidified their status as political powerhouses,” Ahmad told BenarNews. 

The political landscape has shifted dramatically, and Sabah and Sarawak, once considered on Malaysia’s political periphery, have become essential players in the nation’s power dynamics, analysts said. 

Anwar, in his attempts to balance the interests of both Peninsular Malaysia and the Borneo states, previously pledged that his administration was committed to lifting up the dignity of all regions, particularly those that are rural, remote or affected by urban poverty. 

James Chin, a professor at the University of Tasmania, said demands from Sabah and Sarawak, once fulfilled, could set a precedent for other states such Johor and Penang to stake their own claims for more autonomy. 

“[But] they don’t have a similar agreement like [the 1963 agreement] to back them up. It is more a political demand, whereas for Sabah and Sarawak, it’s about returning the power,” he told BenarNews. 

Chin said oil and gas, in particular, remain as crucial flashpoints.

“For example, why people are angry is because Sabah and Sarawak have lost all their oil and gas revenue and if we look at Petronas Towers, each of the towers was built with oil and gas money from there,” Chin said. 

Autonomy

Frustrated with the federal government, a small but increasingly vocal group of protesters has been pushing lately for Borneo secession, gaining visibility through social media. 

On Sept. 16, an eight-minute video went viral showing a few protesters replacing the Malaysian flag with the flags of Sabah and Sarawak outside of Parliament House in Melbourne, Australia, as bystanders looked on.

“We are lowering the Malaysian flag as a symbol of the end of Malaya’s colonization of Sabah and Sarawak,” the protesters said.

Malaysian authorities have launched an investigation into the incident, which has been shared on social media platforms and attracted significant attention back home.

Meanwhile, Dominique Ng, president of the Sarawak Association for People’s Aspiration, an NGO, has advocated for more autonomy.

“It will certainly improve the lives of Sarawakians in the sense that we would have more control of our own destiny, and not have to live to the political whims and dictates of the dominant culture or practices of our counterparts in West Malaysia. 

“Borneo should go all out for complete control of their natural resources and for self-governance,” Ng told BenarNews. “The biggest obstacle is just the lack of political will.”

But for many in the region, the fight is far from over. 

“It will take a long time to improve anyone’s life here, but we are hopeful,” Nadia Samsuddin, 25, a private sector worker from Sandakan, Sabah, told BenarNews. 

“It’s not just about the money – it’s about the dignity of being able to control our own future.”