Mahathir’s crab mentality over Sarawak’s success

 

Dr Mahathir Mohamad’s recent suggestion that Sarawak, now a high-income state, should support poorer states is ironic and showcases a “crab mentality” undermining states that have achieved economic success.

Although Sarawak has achieved high-income status, it still faces a prevalent poverty rate of 10.8% in 2022, the third highest in the nation, after Sabah and Kelantan.

Mahathir’s remark overlooks the federal government’s 61 years of neglect of East Malaysia, during which he was prime minister for 23 years with the Umno-Barisan Nasional government, and two more years with the Pakatan Harapan government.

He did not lift the East Malaysian states out of abject poverty despite his nearly three decades in the top post.

Mahathir is well-known for having promised a 20% oil royalty for Sabah and Sarawak as part of the PH manifesto for the 2018 general election, only to retreat from this commitment when it was time to deliver.

What Pakatan Harapan promised

The 2018 PH manifesto, in which Mahathir wrote the foreword, states that “the demands of the people of Sabah and Sarawak based on the 1963 Malaysia Agreement have not been heeded by the Umno-led BN government till today”.

It continues: “In every election campaign, Umno and BN have promised many changes and reforms. However, this is merely a bait. Post-election, promises remain just that, while large shares of East Malaysia’s wealth are channelled to the federal coffers.”

In Promise 40 of the same document, PH and Mahathir pledged to secure “the rights of Sabah and Sarawak to revenue from their natural resources such as oil and gas”, and to ensure “the share of funds that rightfully belongs to Sabah and Sarawak”.

Mahathir’s failure

Yet, during Mahathir’s tenure as the PH government’s prime minister, this commitment was not fulfilled.

Mahathir’s recent comments are like the Malay idiom “seperti kacang lupakan kulit”, forgetting the way the Bornean states helped build Malaysia by contributing to the federal coffers through its oil and gas resources.

Now as Sarawak finally begins to enjoy the fruits of its labour after 61 years as partners in Malaysia, Mahathir suggests that its wealth must be shared with poorer states.

Why Kelantan failed

Some may suggest that oil-producing states like Kelantan in West Malaysia have struggled economically, not due to a lack of resources but because of federal interference and the focus on race and religion over development.

Identity politics remains prevalent as a tool to divide and control, often for self-serving purposes. Such scorched-earth ideologies surrounding race and religion have stunted the state’s economic growth.

Sarawak, unburdened by such divisive issues, had wisely shut Umno out of its state politics, going on to surge ahead of many states in Peninsular Malaysia. Any state could emulate Sarawak’s economic progress by prioritising development over identity politics.

Racial issues

The recent brouhaha over the display of Chinese flags at a festival, followed by counteractions from certain Malay groups, risks setting Malaysia back significantly.

China is Malaysia’s largest trading partner, and it’s likely that Chinese officials have noted how some groups have exploited minor misunderstandings to create division.

A similar controversy arose previously over the KK Mart socks issue; such furores waste energy on non-issues, turning minor misunderstandings into major conflicts.

Good management

Sarawak premier Abang Johari Openg had a good response to Mahathir: “We manage our economy well, that is why we can achieve high-income status. So, it is up to the other states (to manage their economy) and work harder.”

If I might add, furthermore, it is the duty of the federal government to help the other states.

Since forming Malaysia as equal partners in 1963, Sabah and Sarawak have contributed significantly to funding development in Peninsular Malaysia through their oil and gas resources.

According to former finance minister Tengku Razaleigh Hamzah, the enactment of the Petroleum Development Act in 1974 and the establishment of Petronas marked a shift towards the nationalisation of oil resources, and introduced a revenue-sharing agreement between the states and the federal government.

Tengku Razaleigh stated: “We wanted to make sure that there was no quarrel between the states and the federal government, and between the states. So we made sure that the payment was the same for everybody.”

More equal than others

But the oil cash payments should not be equal across all states. As Malaysia’s largest oil producers, and as founding partners of the federation, Sabah and Sarawak are entitled to a greater share of oil revenue.

In 2020, it was reported that petroleum cash payments amounted to RM12.78 billion for Sabah and RM22.04 billion for Sarawak from 2008 to 2019.

In contrast, Petronas paid RM282 billion in dividends to the federal government over the same period. These figures reveal that the federal government keeps the lion’s share of profits derived from Sabah and Sarawak’s oil and gas resources.

Where does the money go?

While revenue sharing is essential in a federal system, one must question whether the federal government is spending the oil and gas revenue derived from the Borneo states wisely.

Take, for example, the RM4.06 billion trans-Sabah gas pipeline project, started in 2016 by the BN government. The project involves laying 662km of gas pipelines from the Sabah west coast’s oil and gas terminal to its east coast.

It was later revealed that approximately 88% of the project’s value had been paid out to a Chinese contractor, despite only 13% of the work being completed.

Mahathir and the current government should address corruption and plug the leakages first before talking about revenue sharing. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.