How Did Sabah and Sarawak Become the "ATMs" of Malaya?
The history of Malaysia's formation and its political trajectory since independence has led to Sabah and Sarawak being systematically exploited for their natural resources, while the promises made to their peoples under the Malaysia Agreement 1963 (MA63) remain largely unfulfilled.
The reality of how Sabah and Sarawak came to be marginalized, exploited, and relegated to the status of "ATMs" for Malaya stems from several historical, legal, and political facts.
1. *The Unlawful Transfer of Sovereignty (1963)*
*On 16 September 1963,* the newly formed Federation of Malaysia included Sarawak and North Borneo (now Sabah), with the territory effectively handed over from British colonial rule to Malaya. This transfer was carried out under extraordinary circumstances, without a clear legal or democratic basis, amidst a state of emergency where opposition to the formation was heavily suppressed.
The legitimacy of this transfer was compromised by the failure to honour the self-determination rights of the Indigenous peoples of these territories.
The political process leading to Malaysia’s formation was rushed, and the people of Sabah and Sarawak were not given a genuine opportunity to exercise their right to self-determination in a fully free and fair manner. Instead, their inclusion was largely orchestrated by the interests of Malayan elites, who sought to expand their control over the region’s vast resources.
2. *Malaya Replacing the British as the Colonial Power*
Following the formation of Malaysia, Malaya effectively replaced British colonial rule as the dominant foreign power in the newly united federation. The Malayan military and Special Branch took on the role of suppressing any resistance, particularly in Sarawak, where a significant independence movement was emerging. Thus, while Sarawak and Sabah were promised greater autonomy, the reality was that they became subjects under a new colonial power – Malaya.
3. *Emergency Laws and the Extension of Malayan Control*
From the outset, the governance of Malaysia—encompassing all states, including Sarawak and Sabah—was conducted under emergency laws. The Internal Security Act (ISA) and other draconian measures, initially applied to Malaya, were extended to the Bornean states, effectively suppressing any dissent. These laws, meant for national security purposes, ensured that any challenge to the federal government’s authority or calls for autonomy were swiftly crushed.
This authoritarian governance set the stage for the gradual Malayanization of both Sabah and Sarawak, beginning with the Ningkan Crisis in 1966, which saw Sarawak’s first Chief Minister, Stephen Kalong Ningkan, ousted with the help of the Malayan federal government.
4 *. Breach of MA63 and Systemic Marginalization*
*The Malaysia Agreement 1963 (MA63, if valid)* enshrined guarantees for Sarawak and Sabah, including specific rights to autonomy, control over their natural resources, and a special position in the federation. However, these agreements were systematically violated by the federal government over the decades.
• The Constitutional amendments, particularly the Constitutional Amendment of 1966 (CSA66), which unlawfully curtailed the political power and autonomy of the Bornean states, breached the principles laid out in MA63.
• The imposition of the New Economic Policy (NEP) in 1971, focused on Ketuanan Melayu (Malay supremacy), further entrenched the political and economic dominance of Malaya, depriving Sabah and Sarawak of their fair share of development.
• Legislative acts like the Petroleum Development Act 1974 (PDA74) and Act 354 systematically eroded the rights guaranteed to Sabah and Sarawak under MA63. These acts gave the federal government control over key resources, including oil and gas, which had previously been under the jurisdiction of the Bornean states.
These policies led to the unbridled plundering of Sabah and Sarawak’s resources, which were diverted to fund Malaya's development, leaving the two Bornean states among the poorest and most underdeveloped regions in the federation.
5. *Religious Apartheid and the Rise of Extremism*
From 1971, Malaysia’s political direction shifted, and the country became increasingly dominated by Islamic extremism and Arabization.
The policies that followed, including the Islamization of the federal government and the introduction of religious education systems, marginalized non-Malay and non-Muslim populations, particularly in Sabah and Sarawak, where a significant portion of the population is Christian, animist, or adheres to other indigenous belief systems.
This religious apartheid led to increasing Talibanization and Arabization, which further alienated the peoples of Sabah and Sarawak.
The federation's shift towards a more theocratic state stood in stark contrast to the secular promises made to Sabah and Sarawak under MA63.
6. *Corruption, Mismanagement, and Underdevelopment*
The systemic corruption and lack of transparency in the federal government’s management of Malaysia’s resources became apparent over time. The elites in Malaya, benefiting from Patronage Politics and the dominance of UMNO (United Malays National Organisation), mismanaged the wealth extracted from Sabah and Sarawak. While the Malayan political establishment grew wealthier, the Bornean states, despite their wealth in natural resources, were left to stagnate.
For over 60 years, the people of Sabah and Sarawak faced economic neglect, infrastructural deficiencies, and limited opportunities for development. Sarawak’s oil and gas resources, in particular, were siphoned off to fuel the growth of Malaya, while the Bornean states saw little investment in their own growth or development.
7. *The Rise of Political Discontent*
The marginalization and continued violations of MA63 have led to increasing political discontent in Sabah and Sarawak. The regions' political elites and the people have begun to openly challenge the federal government's failure to honour its promises.
• *YB Dato Lo Khere Chiang, a prominent GPS (Gabungan Parti Sarawak) leader* , publicly stated in a January 2025 speech that, had a referendum been held, the majority of Sarawakians would have chosen independence. His candid remarks highlight the depth of frustration and resentment felt by Sarawakians who feel betrayed by the federal government.
• Dato Lo also remarked that Sarawak’s status had been reduced to that of a “subordinate state”—a vassal rather than an equal partner in the federation.
•
Conclusion: *A Nation Built on Broken Promises*
The story of Sabah and Sarawak's integration into Malaysia is a tale of broken promises, systemic exploitation, and political subjugation.
Despite the vast wealth generated from their natural resources, the Bornean states have been left impoverished, with their peoples sidelined from the benefits of their own resources.
The failure to honour MA63, combined with ongoing Malayanization, resource exploitation, and religious apartheid, has led many to question the future of the federation.
As Dato Lo Khere Chiang and others in Sarawak have pointed out, the growing disillusionment among the people of these states suggests that their desire for independence is becoming a more likely outcome.
Malaysia, as it currently exists, is seen by many as a failed state, with Sabah and Sarawak being relegated to the role of ATM—used to fuel the development of Malaya, while they remain underdeveloped, marginalized, and politically disempowered.
*The call for Sarawakian independence is not merely an expression of frustration—it is a demand for self-determination, for the restoration of their sovereignty, and for the fulfilment of the promises made over six decades ago.*
Opinion by Robert Pei
SSRANZ
05/01/2025
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