MA63 Agreement: Sabah and Sarawak Set to Receive RM600 Million Each in Special Allocations

  

Foto : Bernama photo

In a significant development, both Sabah and Sarawak are poised to receive an increase in their special allocations, with each state now entitled to RM600 million in 2024. This was announced by Deputy Prime Minister Datuk Seri Fadillah Yusof, who also chairs the Malaysia Agreement 1963 (MA63) Implementation Action Council Technical Committee. The announcement comes as part of ongoing efforts to address the long-standing concerns of both states under the framework of MA63.

This substantial increase represents a doubling of the special entitlement from this year’s RM300 million allocation. However, it is important to note that this financial boost is described as an interim measure while the 40% revenue-sharing formula—a key demand from Sabah and Sarawak—remains under discussion. The payments are being made in accordance with Article 112D of the Federal Constitution.

 

Interim Measure Amid Delayed Revenue-Sharing Formula

Deputy Prime Minister Fadillah clarified that while both states have been advocating for the implementation of the 40% revenue-sharing formula, this goal could not yet be prioritized. Instead, the RM600 million allocation serves as an interim solution to address some of the financial concerns raised by the two states.

"The Prime Minister has decided to raise the interim allocation from RM300 million to RM600 million for each state," Fadillah stated, referring to the discussions that took place at the MA63 Implementation Action Council meeting in Kota Kinabalu. The meeting was chaired by Prime Minister Datuk Seri Anwar Ibrahim, and its agenda focused on resolving various outstanding issues under the Malaysia Agreement 1963.

Initially, the decision regarding the increased allocation was expected to be announced during the national budget tabling. However, it was revealed ahead of schedule at the MA63 meeting, underscoring the importance of the matter for both Sabah and Sarawak.

 

Positive Reception from State Leaders

Sabah’s Chief Minister Datuk Seri Hajiji Noor and Sarawak’s Premier Tan Sri Abang Johari Openg, both of whom were present at the meeting, reportedly welcomed the increased allocation with "an open heart," according to Fadillah. Their acceptance of the new figures highlights the cooperative spirit between the federal government and the state administrations in tackling long-standing financial and administrative concerns.

Fadillah emphasized that the increase in allocations, while substantial, is merely a temporary measure. The 40% revenue-sharing formula, a major point of contention, remains unresolved. The formula would see Sabah and Sarawak receiving a significant portion of the federal revenue collected from their respective states. However, implementing this formula involves complex negotiations that have been ongoing for some time.

 

Unresolved Issues: Sea Borders, Oil Royalties, and Parliamentary Representation

While the RM600 million allocation is a positive step, several key issues remain unsettled. Fadillah candidly acknowledged that the meeting resulted in some points of agreement but left other matters unresolved, particularly on critical topics like sea borders, oil royalties, parliamentary representation, and stamp duty.

“These issues are complex, as they involve different legal interpretations between the federal and state governments,” Fadillah explained. He added that these unresolved issues would require further discussions and negotiations, noting that the federal and state governments would need to "agree to disagree" on certain points until a consensus can be reached.

 

Legal Hurdles: The Territorial Sea Act and Revenue Entitlements

During the meeting, the Territorial Sea Act 2012 emerged as one of the most contentious topics. Fadillah indicated that the issue could not be resolved by the technical committee and would instead be referred to higher authorities, including the Prime Minister, Sabah's Chief Minister, and Sarawak's Premier, for further deliberation.

Additionally, Fadillah declined to comment on the 40% revenue entitlement or the Territorial Sea Act, citing ongoing court cases. A judicial review is currently being conducted in the High Court, and an originating summons has been filed by a Sabah-based non-governmental organization (NGO). “It is sub judice to comment on these matters,” he noted, emphasizing that the legal process must be allowed to proceed without interference.

 

Progress on Education Sector Devolution

While financial allocations and legal matters dominated much of the discussion, the meeting also touched on the partial devolution of the education sector for both Sabah and Sarawak. This has been a long-standing request from both states, aimed at giving them more autonomy in managing their own educational systems.

Fadillah reported that Sabah is still in the negotiation phase with the federal Education Ministry. Further consultations are needed between the Ministry and the state’s education department directors, especially concerning the appointment of key personnel. The devolution process for Sarawak, on the other hand, is reported to be progressing more smoothly, though details remain sparse.

 

One-Third Parliamentary Representation

Another major issue on the agenda is the call for both Sabah and Sarawak to regain one-third of the parliamentary seats, a figure which was guaranteed under the original Malaysia Agreement 1963. Over the years, the number of parliamentary seats allocated to Sabah and Sarawak has dwindled in proportion to Peninsular Malaysia, leading to concerns about the dilution of the states’ political representation.

Fadillah confirmed that this issue would be discussed at the next MA63 technical council meeting, scheduled to take place in the next three months. This meeting is expected to delve deeper into the legal and political implications of restoring one-third parliamentary representation for the two states.

 

Moving Forward: Continuous Dialogue and Negotiation

The recent MA63 talks are part of an ongoing process to address the historical grievances of Sabah and Sarawak and to ensure that both states receive equitable treatment within the Malaysian Federation. The increase in special allocations to RM600 million for each state marks a significant milestone in this journey, but it is far from the final solution.

Many critical issues remain unresolved, including those related to the Territorial Sea Act, oil royalties, and the all-important revenue-sharing formula. The complexity of these matters, coupled with differing legal interpretations and the need for further political negotiations, suggests that the path to a comprehensive resolution will be a long one.

However, the federal government’s willingness to continue dialogue, as evidenced by the two-and-a-half-hour meeting and the promise of further discussions in the coming months, bodes well for future progress.

As Sabah and Sarawak move forward with increased financial support, attention will undoubtedly shift to the broader goals of achieving greater autonomy, securing fair revenue distribution, and ensuring equitable political representation. The next round of talks will be closely watched as both states continue to press for their rights under the Malaysia Agreement 1963.

In the meantime, the RM600 million allocations serve as a crucial interim measure to help address the immediate needs of Sabah and Sarawak, while the larger, more complex issues remain the subject of ongoing negotiation and legal consideration.