Monday, January 7, 2013

Sabah: Looking Back for the Future

Distinguished Guests and Friends,

Looking Back 50 Years of Malaysia

1                    A Happy New Year to all. This year, 2013 is asignificant year. It marks 50 years of the formation of Malaysia. It is therefore appropriate to look back over this half a century to see whether developments and progress have met the aspirations and dreams of the people of Malaya, Sabah and Sarawak when they agreed to form a nation.If not,we need to know what is to be done. We are looking back for the future.

The Basis for Malaysia

2        What were the dreams and aspirations? What did the people of Malaya, Sabah and Sarawak in 1963 think of the proposalto form Malaysia? Brunei pulled out on the eve of the proclamation and Singapore left in 1965. Thethinking is summed up in words of Lord Cobbold, head of the Commission set up to determine whether the people of North Borneo and Sarawak supported the proposal to create Malaysia. He said at paragraph 144 of the Cobbold Commission Reportas follows:

“About one-third of the population of each territory strongly favours early realization of Malaysia without too much concern about the terms and conditions.
Another one-third, many of them favourable to the Malaysia project ask, with varying degrees of emphasis, for conditions and safeguards varying in nature and extent: the warmth support among this category would be markedly influenced by a firm expression of opinion by the Governments that the detailed arrangements eventually agreed upon are in the best interestof the territories.

The remaining third is divided between those who insist on independence before Malaysia is considered and those who strongly prefer to see British rule continue for some years to come.If the conditions and reservations which they have put forward could be substantially met, the second category referred to above would generally support the proposals. Moreover, once a firm decision was taken, quite a number of the third category would likely to abandon their opposition and decide to make the best of a doubtful job.

There will remain a hard core, vocal and politically active, which will oppose Malaysia on any terms unless it is preceded by independence and self-government: this hard core might amount to near 20 percent of the population of Sarawak and somewhat less in North Borneo.”

3                    It is clear from this that about 70 percent of the population of Sabah and Sarawak were in favour of Malaysia provided the terms and conditions were in the best interest of the territories.

4                    It was also made clear that the people of Sabah and Sarawak did not agree to Malaya “taking-over” the territories. This is set forth in paragraph 237 of the Report as follows:-

            “…It is a necessary condition from the outset, Malaysia, should be regarded by all concerned, as an association of partners, combining in the common interest to create a new nation but retaining their own individualities. If any idea were to take root that Malaysia would involve a “take-over” of the Borneo territories by the Federation of Malaya and the submersion of the individualities of North Borneo and Sarawak, Malaysia would not, in my judgment, be generally acceptable or successful. I recommend that in the forthcoming negotiations, Governments should pay close attention to this point, both in its psychological and in its practical aspects.”
5                    This gave rise to the 20 Point Agreement for Sabah and 18 Point Agreement for Sarawak that formed the basis of the negotiations that culminated in the Malaysia Agreement, amendments to the Federal Constitution of Malaya to become the Federal Constitution of Malaysia and the Proclamation of Malaysia. Therefore the spirit in which Malaysia was formed should be safeguarded and honoured to ensure a progressive, united and harmonious multi-racial nation.

What happened after Malaysia was formed? Sabah from the 2nd Richest became the Poorest State

6                    What happened after Malaysia was formed was certainly not what the people of Sabah and Sarawak intended. In 1970, Sabah was the 2nd richest state after Selangor. Sabah had the 3rd highest real GDP growth per capital after Wilayah Persekutuan and Selangor. They were far above the national average. By 2000, Sabah was lagging 35% behind the national average for real GDP growth per capital. Sabah was 12th with Kedah 13th and Kelantan 14th.

7                    By 2010, the World Bank reported in the Malaysian Economic Monitor that Sabah had the largest number of poor thereby confirming it was the poorest state in Malaysia. The deep levels of poverty in Sabah could be seen from the fact that Sabah with only 10% of the country’s population had 40% of the poverty-stricken. This is compared to Selangor with a quarter of the population and less than 10% of the poor. The World Bank identified that most of the poor in Sabah is found in the rural areas. Some of the areas of deep concern were health, education, social facilities and services and human resource development. Deep pockets of poverty exist in certain social economic groups as well as in certain areas where the poor have the least access to services and employment opportunities.

8                    What has gone wrong? How could Sabah with vast resources of oil and gas, timber, cocoa, palm oil and other commodities performed so badly? Where have the benefits from these resources gone? If Malaysia was formed as associates in partnership between Malaya, Singapore, Sabah and Sarawak, why is Sabah with all its richest the poorest after 50 years?

The Reasons for the Fall

9        The poor performance of the Sabah economy had been recognized by the government of Sabah in the Outline Perspective Plan Sabah 1995. They revealed the following facts:-
1)        The State’s economy had been growing out of tandem with the national economy;
2)        The growth of the State’s economy had been erratic;
3)        The economy is still dominated by the primary sector;
4)        Unemployment remains persistently high;
5)        The investment ratio is low by national standard with a massive outflow of funds from Sabah;
6)        Rapidly, depleting timber and petroleum resources;
7)        Limited sources of economic growth; and
8)        Low value-added economic activities.

Corruption and Illicit Outflow   

10               How can there be low economic growth below the national average while the rich resources have become depleted with massive outflow of funds from Sabah? The answer is corruption.

11               The case of Michael Chia is illustrative. Michael Chia was detained by the Hong Kong ICAC for possession of Singapore Dollars 16 million equivalent of RM40 million. He said it did not belong to him and that he was holding for someone else. The ICAC asked MACC for assistance to investigate whether the funds were proceeds from corrupt timber practices.The Minister in the Prime Minister’s Department, Datuk Seri Nazri informed Parliament that MACC informed ICAC that the money was a political donation for UMNO Sabah.ICAC had to close its file.

12               It later turned out Datuk Nazri’s son is driving a luxurious Humvee car owned by Michael Chia. The Chief Prosecutor of Hong Kong in a rare interview said he was prepared to reopen the investigation if there are fresh leads. Rafizi and I together with others have provided ICAC with documents for them to reopen the investigation.

13               Sabahans are well acquainted with the politics of plunder which was one of the catalysts for the several changes in the state government.

Low Value Added Economic Activity in Sabah

14               One of the reasons in the Sabah 1995 Outline Perspective Plan for the poor economic performance is the low value added economic activity. The culprit here is the 1981 Cabotage Policy. It is in fact a Sabah sabotage policy.Under this Cabotage policy, goods cannot be shipped from foreign countries directly to Sabah and Sarawak. They have to be shipped from foreign countries to West Malaysian ports and trans-shipped by domestic ships to Sabah and Sarawak. This obviously increased the transportation cost. It is estimated that 46% of the transportation cost for goods is shipping freight which translates into an increase of 5-7% of the consumer price of goods in Sabah and Sarawak.

15       The Cabotage policy is implemented for the benefit of 200 domestic shipping companies owning about 4,500 ships. This is done at the cost of the entire population of Sabah and Sarawak. There is thus no surprise that there is low value added economic activity in Sabah and Sarawak. No manufacturer will invest in Sabah where the transportation costs of his materials and final products make his goods uncompetitive.
16       This is a policy of burdening the many for the benefit of a few.

Cast Your Eyes Over the South China Sea

17        I understand Sabahans’ feeling of being disenfranchised by West Malaysians and the suspicions Sabahans have of West Malaysian or national political parties. However, I ask Sabahans not to just look inward but cast your eyes over the South China Sea.You will see the same poverty, oppression, corruption, plunder and abuse.  The problem is not the people in West Malaysia it is the BN holding power in Putrajaya.

18       Corruption and misuse of the nation’s resources are not confined to Sabah alone. Recently, we saw the public spectacle of Deepak Jaikishan holding the Prime Minister and his wife to ransom through the media.

19       Deepak thought he was the best friend of the wife of the Prime Minister. Documents have been produced to show Deepak paid USD3.9 million for 19 pieces of jewelry said to be for the Prime Minister’s wife.        Deepak forgot that while a dog is man’s best friend, diamond is a woman’s best friend. Rosmah took the diamonds and then treated Deepak like a dog.

20       Deepak said he paid money to obtain a deal to buy a piece of land in Klang from Awan Megah Sdn Bhd. He guaranteed a RM100 million loan taken by his company to buy the land. Awan Megah owned by UMNO Wanita Selangor chief, obtained the land from the Ministry of Defence. The land is meant for a military camp but the Ministry of Defence agreed to transfer the land to Awan Megah for commercial and mixed development.   Awan Megah reneged on the deal and Deepak’s friend refused to help. Thus Deepak threatened to reveal all. Boustead then came in the nick of time to buy Deepak silence. Boustead, a Government GLC paid RM260 million: buying Deepak’s company’s share for RM 30 million, taking over his company’s loan of RM100 million and buying the UMNO Wanita Selangor Chief’s share in Awan Megah for RM130 million.

21       The Government though a GLC paid RM260 million to buy a piece of land originally owned by the Government. This can only happen in Malaysia. 

GFI Illicit Outflow and Wall Street Journal Report

22        The massive outflow of funds from Sabah referred in the 1995 Outline Perspective Plan Sabah is nothing compared to the illicit outflow from Malaysia. According to a Washington watch dog, Global Financial Integrity report in December 2012, Malaysia had the second highest amount of illicit outflow of funds in the world after China in 2010. The illicit outflow for Malaysia increased by 111.8% from USD30.4 billion in 2009 to USD 64.38 billion in 2010. Malaysia won the bronze medal for overall illicit outflow for the ten years from 2001 to 2010. China came in first with USD2.74 trillion, Mexico second with USD 475 billion and Malaysia third with USD 286 billion. This is equivalent to RM876 billion.

23        Malaysia won the dubious honour of being the champion of corruption in the 11 December 2012 Wall Street Journal article that reported Transparency International Bribe Payers Survey 2012 findings. In a survey of 3000 executives over 30 countries as to the country they believed they lost a contract bid because of bribery; 50% named Malaysia making it the worst in the world with Mexico second at 48% and Japan the least with 2%.

24        Corruption and illicit outflow are problems that are not only endemic in Sabah but also the whole country. 

Repeating Mistakes
25        Sabahans realized they have to change their government. Sabah is the only state to have changed its government four times. However, Sabah’s problems have not been resolved despite the bravery and courage of the people for change.The reason is because changing the state government is not enough. Sabahans must also change the Federal Government. The cancer is in the heart of power centralized in Putrajaya.

26        I therefore urge all Sabahans to unite together with West Malaysia and not repeat the mistake of changing the state government while maintaining BN in Putrajaya. It has been said that repeating a mistake each time in the hope of a different result is the height of insanity. We must come to our senses and realize the root cause of the problems lies in BN holding the reins of Federal power.

Pakatan Rakyat’s Programme

27        Pakatan Rakyat will restore the equal partnership with Sabah and Sarawak that formed the basis for Malaysia. Pakatan Rakyat has a programme for Sabah and Sarawak.

28        Pakatan will provide an equitable share of the oil and gas revenue from 5% to 20%. The funds will be used to improve the economy, provide education and eradicate poverty.

29        Pakatan will build and improve the roads and infra-structure, upgrade ports and airports as well as build communication and transport facilities in Sabah and Sarawak. Pakatan will ensure that there are adequate water and electricity supply.

30        Pakatan will appoint Sabahans to Federal, State and other government positions in line with the Borneonisation policy.

31       Pakatan will establish a Royal Commission of Inquiry to resolve the issue of illegal immigrants being given ICs and put on the electoral rolls. The repeated calls for a Royal Commission of Inquiry have not been heeded and the present slow pace of the inquiry confirms the lack of sincerity and urgency by the BN government to resolve this critical issue. This is among the reasons for SAPP, Wilfred Bumburing and Lajim Ukin to leave BN. You have heard earlier this evening, Yang Berhormat Datuk Seri Panglima Lajim Ukin giving the reasons for his leaving UMNO and BN.

To Save Malaysia Is To Save Sabah

32        The problems faced by Sabahans and Sarawakians are also problems faced by Malaysians in the Peninsula. We are all in this together. Malaysia is in the midst of a crisis. Malaysians both in the West and in the East have slept on their rights for 50 years. It is time we wake up and arise together. I urge Sabahans to join hands with your brothers in West Malaysia to save our nation. This is because to save Malaysia is to save Sabah.

33        InikalilahTukar! Reformasi! Reformasi! Reformasi!

Thank You and God Bless,
William Leong Jee Keen
Treasurer-General Parti Keadilan Rakyat
Member of Parliament for Selayang
5 January 2013.

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