FROM PAKATAN HARAPAN TO PERIKATAN NASIONAL A Missed Opportunity for Reforms for East Malaysia? Anantha Raman Govindasamy TRENDS IN SOUTHEAST ASIA ISSN 0219-3213 TRS12/21s ISSUE ISBN 978-981-4951-92-0 30 Heng Mui Keng Terrace 12 Singapore 119614 http://bookshop.iseas.edu.sg 9 7 8 9 8 1 4 9 5 1 9 2 0 2021 TRENDS IN SOUTHEAST ASIA 21-J07718 01 Trends_2021-12.indd 1 31/5/21 3:18 PM The ISEAS – Yusof Ishak Institute (formerly Institute of Southeast Asian Studies) is an autonomous organization established in 1968. It is a regional centre dedicated to the study of socio-political, security, and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment. The Institute’s research programmes are grouped under Regional Economic Studies (RES), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS). The Institute is also home to the ASEAN Studies Centre (ASC), the Singapore APEC Study Centre and the Temasek History Research Centre (THRC). ISEAS Publishing, an established academic press, has issued more than 2,000 books and journals. It is the largest scholarly publisher of research about Southeast Asia from within the region. ISEAS Publishing works with many other academic and trade publishers and distributors to disseminate important research and analyses from and about Southeast Asia to the rest of the world. 21-J07718 01 Trends_2021-12.indd 2 31/5/21 3:18 PM FROM PAKATAN HARAPAN TO PERIKATAN NASIONAL A Missed Opportunity for Reforms for East Malaysia? Anantha Raman Govindasamy ISSUE 12 2021 21-J07718 01 Trends_2021-12.indd 3 31/5/21 3:18 PM Published by: ISEAS Publishing 30 Heng Mui Keng Terrace Singapore 119614 [email protected] http://bookshop.iseas.edu.sg © 2021 ISEAS – Yusof Ishak Institute, Singapore All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form, or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission. The author is wholly responsible for the views expressed in this book which do not necessarily reflect those of the publisher. ISEAS Library Cataloguing-in-Publication Data Name(s): Raman, G. Anantha (Govindasamy Anantha), author. Title: From Pakatan Harapan to Perikatan Nasional : a missed opportunity for reforms for East Malaysia? / Anantha Raman Govindasamy. Description: Singapore : ISEAS–Yusof Ishak Institute, June 2021. | Series: Trends in Southeast Asia, ISSN 0219-3213 ; TRS12/21 | Includes bibliographical references. Identifiers: ISBN 9789814951920 (soft cover) | ISBN 9789814951937 (pdf) Subjects: LCSH: Malaysia—Politics and government. | Malaysia, East— Politics and government. Classification: LCC DS501 I59T no. 12(2021) Typeset by Superskill Graphics Pte Ltd Printed in Singapore by Mainland Press Pte Ltd 21-J07718 01 Trends_2021-12.indd 4 31/5/21 3:18 PM FOREWORD The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics. The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN). The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region. THE EDITORS Series Chairman: Choi Shing Kwok Series Editor: Ooi Kee Beng Editorial Committee: Daljit Singh Francis E. Hutchinson Norshahril Saat 21-J07718 01 Trends_2021-12.indd 5 31/5/21 3:18 PM 21-J07718 01 Trends_2021-12.indd 6 31/5/21 3:18 PM From Pakatan Harapan to Perikatan Nasional: A Missed Opportunity for Reforms for East Malaysia? By Anantha Raman Govindasamy EXECUTIVE SUMMARY • The Malaysia Agreement 1963 (MA63) brought together Peninsular Malaya with the East Malaysian states of Sabah and Sarawak. This Agreement afforded certain rights and obligations to these two states, notably in areas such as religion and language, financial autonomy, immigration, judicial autonomy, and finance and tax issues. • However, since the signing of this foundational treaty, East Malaysians have become discontented. Key frustrations include a gradual erosion of the stipulated privileges by the federal government, persistent underdevelopment, as well as the perceived unequal distribution of petroleum revenue earned from these states. • When Pakatan Harapan came to power in 2018, there were expectations from Sabah and Sarawak that the new administration would be committed to the restoration of East Malaysia’s special position within the Malaysian Federation. • In order to address long-standing tensions, Pakatan Harapan established a Special Cabinet Committee on MA63 to look for new ways of restoring East Malaysia’s prerogatives. • The Special Cabinet Committee managed to resolve seventeen out of twenty-one issues pertaining to the economy, finance and the judiciary. However, the most complex issues pertaining to the sharing of oil revenue were outstanding. One key outcome was that the Committee proposed a constitutional amendment to recognize Sabah, Sarawak and Peninsular Malaysia as equal partners in the Federation. 21-J07718 01 Trends_2021-12.indd 7 31/5/21 3:18 PM • However, the proposed amendment did not garner the necessary two-thirds majority in parliament. A bloc of parliamentarians allied with the Gabungan Parti Sarawak—a coalition of Sarawak-based parties formerly aligned with ousted national coalition Barisan Nasional—abstained from voting. • Since the advent of the Perikatan Nasional administration, the broader issue of East Malaysian rights has received little attention. It is likely that, rather than seeking to address the fundamental tensions between the Peninsula and East Malaysia, the current administration will seek to offer targeted benefits to elites from the region. 21-J07718 01 Trends_2021-12.indd 8 31/5/21 3:18 PM From Pakatan Harapan to Perikatan Nasional: A Missed Opportunity for Reforms for East Malaysia? By Anantha Raman Govindasamy1 INTRODUCTION Sabah and Sarawak formed the Malaysian Federation together with Malaya and Singapore in 1963. Instrumental to the formation of the new Federation was an international treaty called the Malaysia Agreement 1963, signed in London by the British and Malayan Federation governments, and political representatives from Sabah, Sarawak and Singapore. The Malaysian Agreement guaranteed a special position as demanded by the East Malaysian political elites in the areas of religion and language, finance and tax, judiciary and immigration. In the early stages, there was huge expectation that joining the Malaysian Federation would elevate East Malaysia’s economic growth and bring adequate development to these vastly rural states. Substantial oil and gas discoveries in the early 1970s further prompted demands for meaningful economic development in Sabah and Sarawak. The ruling federal government under Barisan Nasional (BN), while acknowledging the lagging economic conditions in East Malaysia, failed to meet expected levels of development and poverty reduction. At the same time, Peninsular Malaysia was systematically developed 1 Anantha Raman Govindasamy is Associate Professor at the Centre for the Promotion of Knowledge and Language Learning (CPKLL), Universiti Malaysia Sabah (UMS) and Visiting Research Fellow at the ISEAS – Yusof Ishak Institute, Singapore. The author would like to express his gratitude to Francis Hutchinson and Lee Hwok Aun for their useful comments and suggestions on the initial draft. 1 21-J07718 01 Trends_2021-12.indd 1 31/5/21 3:18 PM as one of the world’s fast-growing economies. Sabah’s and Sarawak’s special position in the federation, especially various safeguards related to economic well-being, were eroded over time through legislative amendment and political manoeuvring that strengthened Peninsular power over East Malaysia. The unprecedented win for Pakatan Harapan (PH) in the 2018 Malaysian General Election, however, revitalized demands for the restoration of East Malaysia’s special position in the Malaysian Federation. A Special Cabinet Committee on MA63 was created and headed by the Prime Minister to oversee the restoration of the spirit of the initial Malaysia Agreement. These efforts were spearheaded by the PH-aligned Sabah state government, helmed by Chief Minister Shafie Apdal. By 2019, this Committee had amicably resolved seventeen out of twenty-one matters tabled by the East Malaysian states. It even proposed a constitutional amendment to recognize Sabah, Sarawak and Peninsular Malaysia as equal partners in the Malaysian Federation. This initiative unfortunately failed to get the required two-thirds parliamentary majority. The collapse of PH in February–March 2020 and the rise of a Perikatan Nasional (PN) federal administration created uncertainty regarding the proposed restoration of East Malaysian