What restoring MA63 rights means

The Malaysian government has promised to restore the rights of Sabah and Sarawak as equal partners forming Malaysia, in line with the Malaysia Agreement 1963 (MA63). This will mean giving the two states more autonomy over several areas currently controlled by the federal government.


Sabah and Sarawak produce about 60 per cent of Malaysia's total petroleum output, worth an estimated RM38 billion (S$12 billion) last year, but they each receive only 5 per cent of the oil revenue, reported The Star. Pakatan Harapan (PH) had, in its election manifesto, promised to raise oil royalties to 20 per cent, but it is now disputed whether this means 20 per cent of revenue or profits.

Malaysia's oil and gas resources are now vested in national oil company Petronas, under the Petroleum Development Act in 1974. Sarawak has pushed for its own state oil company and questioned the legality of a 2012 move to limit its territorial waters to only 3 nautical miles off its coast, from 12 miles originally - where it could lay claim to most of its hydrocarbon deposits.


Sabah and Sarawak seek to control their own finances, taxes and development, with the right to borrow on their own credit. The PH government had pledged to decentralise the fiscal administration system so that up to 50 per cent of tax revenue collected from the two states is spent on their development needs.


Malaysia's official language is Malay and its official religion Islam, with all ethnic Malays defined in the Constitution as being Muslim.

Sabah and Sarawak would prefer English to remain the official language and for its multicultural population to enjoy religious freedom. The majority of the main indigenous tribes here - the Kadazandusun Murut and Dayaks - are non-Muslim.


The states would like to determine their own educational systems, particularly since Malaysian history textbooks talk about Sabah and Sarawak joining Malaysia, instead of forming Malaysia as equal partners with Malaya.


The states require that only locals be appointed to senior civil service posts. This happens in practice as Sabah and Sarawak have control over immigration and can deny entry to Malaysians from other states, who require permits to live and work there.

A version of this article appeared in the print edition of The Straits Times on September 18, 2018, with the headline 'What restoring MA63 rights means'. Print Edition | Subscribe