This is an abridged version of the James C. Jackson Memorial Lecture, delivered by Professor James Chin of the University of Tasmania as the keynote address at the 24th Conference of the Malaysia & Singapore Society of Australia (MASSA), held at Murdoch University on 15 January 2026. The James C. Jackson Memorial Lecture commemorates the late Professor James C. Jackson, a distinguished scholar of Southeast Asian Studies at Griffith University and former President of MASSA. The lecture is traditionally delivered by an eminent scholar whose work has made significant contributions to the study of Malaysia and Singapore.

The slogans ‘Sabah for Sabahans’ and ‘Sarawak for Sarawakians’ have travelled a long distance from the margins of regional politics to the centre of Malaysia’s national conversation. What was once dismissed in Putrajaya as provincial grumbling has become a structural feature of the federation’s political life.

In recent state elections, local coalitions have achieved near-total dominance of the Dewan Undangan Negeri in both Borneo states. In Sarawak, Gabungan Parti Sarawak (GPS) controls 80 of the 82 seats, a level of dominance rarely seen in any Malaysian legislature. In Sabah, the 2025 state election produced a result in which Gabungan Rakyat Sabah (GRS) won 29 seats and Warisan 25; when other local parties and independents are included, localist forces command roughly 90 per cent of the assembly. These numbers are not accidental. They reflect the consolidation of a coherent state nationalism that challenges the long-standing assumption of a hierarchical Malaysian identity organised around Peninsular Malaysia, or Malaya.

I argue that the grievances of Sabah and Sarawak are not the product of recent opportunism but the cumulative result of an incomplete and, in key respects, breached founding document—the Malaysia Agreement 1963 (MA63). Failure to address those grievances risks the kind of prolonged, low intensity but corrosive conflict that has marked other multi-ethnic federations and unitary states in the region and the world. The discussion proceeds chronologically and thematically: from the original terms of federation, through decades of centralisation and demographic engineering, to the post-2008 and post-2018 redistribution of political leverage, the concrete demands now advanced by East Malaysian leaders, the principal counterarguments from the Malay political establishment, and finally a set of practical and normative recommendations for a more durable asymmetric federalism.

What Happened: The Electoral and Political Consolidation of State Nationalism

For the first half-century after 1963, East Malaysian politics largely operated inside the architecture of Barisan Nasional (BN) hegemony. Local parties functioned as junior partners in a peninsula-centred coalition, delivering reliable parliamentary majorities that helped sustain federal power through successive crises. That pattern worked remarkedly well under the administration of President Mahatir Mohamad until Malaysia’s first regime change in 2018. The immediate fallout from federal BN losing power was Sarawak BN’s decision to leave the BN coalition and reconstitute itself as the independent Gabungan Parti Sarawak (GPS). Sabah’s path has been more fragmented yet no less localist: Warisan, a component of Pakatan Harapan, became the ruling party of Sabah state government, marking the fall of Sabah BN which had ruled the state since 1994.

Since 2018, national parties headquartered in the peninsula have been reduced to marginal players in both states. It has altered the strategic calculus of every federal government since 2018. No federal ruling coalition in Putrajaya can any longer treat Sabah and Sarawak as automatic vote banks. Without the Members of Parliament from Sarawak or Sabah parties, no federal government can be formed.

Driving Factors: The Long Arc of Historical Grievance

The roots of contemporary state nationalism lie in the circumstances of Malaysia’s creation. On 27 May 1961, at a meeting of the Foreign Correspondents Association of Southeast Asia held in Singapore, Tunku Abdul Rahman, the Prime Minister of Malaya, made a landmark announcement proposing the idea of a ‘Greater Malaysia’ that would bring together Malaya, Singapore, North Borneo (later Sabah).

The first step was the establishment of the Cobbold Commission (1962), a joint British-Malayan commission to gauge public opinion in North Borneo and Sarawak on joining the proposed Federation of Malaysia. Its report found roughly one-third of the population strongly in favour, one-third supportive only with strong safeguards, and one-third opposed or preferring independence. Many in Borneo argued there was no genuine consultation. The Commission interviewed only about 4,000 people (less than one percent of the population), included no Bornean members, and operated under time pressure with a predetermined pro-Malaysia agenda. Critics view it as a carefully arranged exercise that gave the British a democratic-looking cover to exit colonial rule while locking the Borneo states into the new federation.

For the Borneo leaders, the price of entry was a carefully negotiated package of safeguards intended to preserve distinct identities, religions, languages, immigration controls and resource rights. These safeguards, known as the Twenty Points, were the product of the Cobbold Commission and the Inter-Governmental Committee Report  of 1962. These documents were the foundation of the final text to the Malaysia Agreement 1963. Key protections included the non-application of Islam as the official religion of the two states, the continued official use of English, control over immigration so that even Malaysian citizens from the peninsula could be denied entry, so-called ‘Borneonisation’ of the civil service, substantial autonomy in education and finance, and a unwritten understanding that parliamentary seat allocation was deliberately designed so that the Borneo territories together with Singapore held slightly more than one-third of the seats in the Dewan Rakyat, the lower house of the Malaysian parliament. That proportion was meant to prevent Malaya from unilaterally amending the Constitution in ways that prejudiced the new partners.

Within a few years these safeguards began to erode. Federal intervention in both Sabah and Sarawak, systematically replaced native leaders with figures more amenable to Kuala Lumpur’s preferences. Kuala Lumpur directly intervened to replace Stephen Kalong Ningkan and Donald Stephens, the chief ministers of Sarawak and Sabah respectively.

The export of Malayan-style communal politics into the multi-ethnic societies of East Malaysia disrupted local coalitions that had previously managed diversity without the same intensity of polarisation. Natural resources, above all oil and gas, were brought under exclusive federal control through the Petroleum Development Act 1974. The producing states were left with a five per cent royalty that many regarded as derisory given the scale of extraction.

With Kuala Lumpur and Barisan Nasional in firm control, East Malaysia was treated as a reliable ‘fixed deposit’ of parliamentary seats for more than half a century. Development spending consistently lagged; roads, electricity, clean water and broadband remained inferior despite the states’ outsized contribution to national resource wealth. Islamisation policies gradually altered the secular character that had been explicitly protected in 1963. In Sabah the controversy known as Project IC (or Project M) involved the systematic issuance of identity cards and citizenship documents to large numbers of Muslim immigrants, primarily from the southern Philippines and Indonesia. A Royal Commission of Inquiry later concluded that it was ‘more likely than not’ that such actions had occurred. The demographic consequences were dramatic: Sabah’s population grew by approximately 390 per cent between 1970 and 2010, transforming the state into a Muslim-majority polity and sharply reducing the electoral weight of Indigenous non-Muslim communities. The number of Indigenous-non-Muslim majority state seats declined while Muslim-majority seats expanded. Non-Muslim Indigenous representatives will never be able to win power via the ballot box again.

To add insult to injury, in 1973 the Sabah Constitution was amended to make Islam the official religion of Sabah, a clear violation of the Malaysia Agreement 1963. Today, Sarawak is the only state without a state religion in the federation.

In 1976 the federal Constitution was amended, removing the explicit distinction between the ‘States of Malaya’ and the ‘Borneo States’. Its political effect was profound: it reinforced a narrative of deliberate downgrading from founding partners to ordinary states. These cumulative experiences—political intervention to remove non-Muslim leaders, resource centralisation, demographic engineering in Sabah, developmental neglect and constitutional reclassification—constitute a coherent historical grievance that is now articulated with increasing precision by both elites and ordinary citizens.

Why Now? The Convergence of Opportunity, Technology and Arithmetic

If the underlying grievances are five decades old, their public intensity has increased markedly only in the last two decades. Several interlocking developments explain the timing. The retirement of strongman Mahathir – in 2003, and the repeal of the Internal Security Act  in 2012 removed instruments that had previously been used to detain dissenters without trial, lifted the fear among the state nationalists. The spread of social media and cheaper connectivity allowed ordinary Sabahans and Sarawakians, including those in remote interiors, to access historical documents, oil-revenue figures and comparative development data without mediation by peninsula-dominated mainstream media. Public discussion of the Malaysia Agreement 1963 moved from closed elite circles into everyday conversation.

The appointment of Adenan Satem as Chief Minister of Sarawak in 2014 proved catalytic. Adenan pursued a ‘Sarawak First’ agenda: negotiating the devolution of 13 administrative powers in an initial phase; publicly asking for 20 percent of oil royalty from the current five percent;  expanding the use of English as an official language in Sarawak; becoming the first state leader in Malaysia to officially recognise the Unified Examination Certificate; and prioritising local employment in federal agencies and Petronas operations. The 2016 Sarawak state election delivered a strong mandate for ‘Sarawak First’. Abang Johari, who succeeded Adenan after his unexpected death in 2017, deepened the strategy, establishing Petroleum Sarawak Berhad (PETROS) and securing greater commercial participation in the oil and gas sector through successive settlements with Petronas.

The 2008 general election forced Barisan Nasional and Najib Razak to acknowledge that its continued hold on federal power depended on East Malaysian seats. With Barisan Nasional unable to secure a majority in Peninsular Malaysia alone, Sabah and Sarawak MPs became indispensable. For the first time in Malaysia’s history, the Speakership of the Dewan Rakyat went to a Sabahan, Tan Sri Pandikar Amin Mulia, and both his deputy speakers also came from Sabah and Sarawak. In 2010, Najib Razak declared 16 September (Malaysia Day) a nationwide public holiday for the first time, recognising that the federation was created in 1963 rather than on Merdeka Day, 31 August 1957. He also convened the first formal meetings between the Prime Minister and the Chief Ministers of Sabah and Sarawak specifically to discuss issues relating to the Malaysia Agreement 1963, signalling recognition of the Borneo states’ constitutional status.

Subsequent political instability in Putrajaya from 2018 onwards, including four changes of government between 2018 and 2022 has only reinforced this leverage. The arithmetic is unforgiving: Without the roughly 25 per cent of parliamentary seats currently held by the two states (57 of 222), no federal coalition can easily command a majority in Parliament, and more importantly, the two-thirds majority required for constitutional amendments. That reality has transformed the political economy of federal–state relations.

Political Consequences: Incremental Gains and a Changing Mindset

The redistribution of leverage has produced measurable, if still incomplete, results. Malaysia Day on 16 September became a national public holiday. East Malaysian politicians secured larger representation in the federal cabinet and other government agencies. Successive administrations established formal federal-cabinet Malaysia Agreement committees to devolve more powers to East Malaysia. The 2018 Pakatan Harapan manifesto listed the restoration of Malaysia Agreement rights as one of its five core pillars. Constitutional amendments in 2021 restored explicit recognition of Sabah and Sarawak’s distinct status under Article 1(2) of the Federal Constitution.

Perhaps the most important shift is psychological. Segments of the Malayan political establishment have begun to internalise the reality that political stability in Putrajaya is difficult to sustain without Borneo support. The era in which East Malaysia could be taken for granted as a passive fixed deposit is over. That recognition, however, remains uneven among the Malay establishment who view any special treatment of Sabah and Sarawak as a threat to the uniformity of the federation.

What Sabah and Sarawak Want

The demands of state nationalists are specific, historically grounded and, for the most part, restorative rather than revolutionary. The four key demands are:

First, formal recognition of ownership over the continental shelf adjacent to their coasts and the petroleum and other natural resources in the seabed and subsoil beneath it. The claim rests on colonial legal instruments issued by the Queen in Council. In 1954, Queen Elizabeth II, acting on the advice of the Privy Council, promulgated two key Orders in Council under the Colonial Boundaries Act 1895. The North Borneo (Alteration of Boundaries) Order in Council 1954 (made 24 June 1954) expressly extended the boundaries of the Colony of North Borneo (now Sabah) to include ‘the area of the continental shelf being the seabed and its subsoil which lies beneath the high seas contiguous to the territorial waters of North Borneo.’ A parallel Sarawak (Alteration of Boundaries) Order in Council 1954 did the same for Sarawak. These instruments treated the continental shelf as part of the colonies’ territory for purposes of ownership and resource jurisdiction, while leaving the waters above as high seas. When both states became part of the Federation in 1963, the Malaysia Agreement 1963 and the Federal Constitution (particularly Article 1(3)) preserved their territorial integrity as it stood on Malaysia Day. Proponents argue that the 1954 Orders therefore formed part of the states’ pre-existing boundaries and laws that were never surrendered to the federal government. Subsequent federal statutes such as the Continental Shelf Act 1966 and the Petroleum Development Act 1974 are viewed as incompatible with this historical and constitutional position, giving rise to ongoing disputes over control of offshore oil and gas resources.

Second, the restoration of a parliamentary seat allocation to the original 1963 formula. At the formation of the federation, Sabah, Sarawak and Singapore together held approximately 34–35 per cent of seats in a 159-seat Dewan Rakyat. After Singapore’s departure, the two Borneo states argued Singapore’s seats should be given to them to maintain the status quo, providing a practical veto over constitutional amendments that affect their interests. At present they hold only approximately 25 per cent (26 seats for Sabah and 31 for Sarawak).

Third, in October 2025 the Kota Kinabalu High Court ruled that Sabah is constitutionally entitled, under Articles 112C and 112D, to a special grant equal to 40 percent of the net federal revenue derived from the state. For the period 1974–2021 the federal government continued to pay a fixed sum based on the 1973 baseline, even though the Constitution clearly required a five-yearly review. The Court ordered the federal and state governments to agree on a formula for calculating the amounts owed for those ‘lost years’ and on the details of payment within 180 days. Sabahans insist the money must be paid because it is a binding constitutional right, not a political favour. The funds are essential to close the development gap in a resource-rich, yet still poor, state with schools, hospitals, roads and basic services that have been underfunded for decades. Instead of accepting the verdict, the federal government successfully appealed and obtained a stay of the payment order. This is widely seen as further delay tactics and indicative of the federal government’s real intention. Many Sabahans are furious, viewing it as open disregard for the Federal Constitution and a clear violation of the Malaysia Agreement.

Fourth, political autonomy, such as autonomy in health and education, and cultural autonomy (given the many native non-Muslim groupings). Many do not accept the Malay and Islamic focus on the federal government.

Leaders in both states consistently emphasise that these demands are advanced within the framework of the Malaysian federation, not as a prelude to secession. The distinction is important. State nationalism in this context is a claim for the proper functioning of asymmetric federalism that acknowledges historical difference rather than a demand for independence. The insistence on the language of ‘equal partnership’ and ‘founding partners’ is an attempt to recover the original political understanding rather than to invent a new one.

The View of the Malay Political Establishment in Peninsular Malaysia

Many in the Malay political establishment of Peninsular Malaysia reject the East Malaysian narrative of systematic Malaysia Agreement betrayal and neglect. They ask why public mobilisation around the Agreement only gained momentum after 50 years of relative quiet. Some observe that leaders from Sabah and Sarawak themselves participated in, or at least acquiesced to, successive centralising measures. Under-development, they contend, owes as much to local corruption, state elite capture (often a coded reference to Taib Mahmud, Sarawak’s notoriously kleptocratic former Chief Minister and Governor) and weak governance as to federal neglect. Additional resources, they argue, would simply enrich the same elites rather than benefit ordinary citizens. The federal government, they point out, has provided security, a common market, education systems, healthcare infrastructure and a shared national identity that the territories might not have secured independently in a more fragmented post-colonial landscape. Indeed, some maintain that had North Borneo and Sarawak never joined the federation, Manila and Jakarta might well have moved in.

Comparisons are frequently drawn with Kelantan and Terengganu, which also receive five percent petroleum royalties under the same federal framework established by the Petroleum Development Act 1974.If Sabah and Sarawak receive special treatment, the argument continues, why not other states with historical claims, economic grievances or strong regional identities, such as Johor or Kelantan?

Some warn that state nationalism may function as a convenient cover for secessionist sentiment, and that once a territory joins a federation it is expected to abide by the evolving rules of that federation rather than continually reopening the founding bargain.

The fear is that special arrangements and more political autonomy for Sabah and Sarawak will set a precedent that unravels the uniformity of the federal system.

These arguments carry weight on certain points. Corruption and elite enrichment have indeed diverted resources in both states, and the petroleum royalty arrangements apply across the federation.

Yet they do not fully address the historical specificity of the Malaysia Agreement.  Sabah and Sarawak entered as distinct entities with negotiated safeguards that the other states never possessed. Treating them simply as ordinary members of a club whose rules were subsequently rewritten by the numerical majority overlooks the founding compact and the international character of the 1963 Agreement.

The Way Forward: Acknowledgement, Asymmetry and Institutional Repair

A durable resolution requires the Malay political establishment to acknowledge that marginalisation occurred and that historical grievances must be addressed with urgency and good faith.

Sabah and Sarawak are not ordinary states; Malaysian federalism was designed from the outset to be asymmetrical with respect to Borneo.

In addition to addressing economic grievances and greater political autonomy, one important approach is the Basic Structure Doctrine. This would treat the foundational elements of the Malaysia Agreement as permanent features in the interpretation of the Malaysian Constitution, so that Parliament cannot dilute or ignore them without the consent of the states concerned.

Equally important is political mind shift: the abandonment of efforts to assimilate East Malaysia into a Malayan political culture organised around the triad of Malay dominance, Islam and the Malay language. The diversity of Sabah and Sarawak is not a temporary anomaly requiring correction; it is a permanent and valuable feature of the Malaysian federation. Respecting that difference strengthens national cohesion rather than weakening it.

Lessons from History and the Cost of Delay

Historical grievances are not unique to Malaysia. Northern Ireland, Catalonia, Aceh, Mindanao, Papua and the long-running conflict in southern Thailand all illustrate the costs of unresolved historical grievances. In each case central governments preferred assimilation and the hope that economic development and the passage of time would dissolve local identities.

The result was frequently generational conflict that proved far more expensive- politically, financially and in human terms, than early, good-faith accommodation would have been. The reluctance of central authorities to deal honestly with historical claims repeatedly produced cycles of mobilisation, repression, coercion, partial concession and renewed mobilisation.

The era of forced assimilation and the unilateral imposition of a dominant political culture has largely passed in the Malaysian context. History cannot be rewritten completely, but past mistakes can be corrected before they harden into new and more intractable ones. The belief that a return to dominant-Malay party rule in Peninsular Malaysia will allow Putrajaya simply to outlast Borneo sentiment is a myth. Demographic realities, the permanent presence of social media, the institutional memory of the Malaysia Agreement, and the unforgiving arithmetic of parliamentary majorities ensure that the issue will remain live.

Putrajaya cannot simply wait for the sentiment to fade.

The rise of state nationalism in Sabah and Sarawak is not inherently a threat to national integrity; it is a reminder of the original terms on which that integrity was constructed. Addressing those terms honestly and structurally offers the best prospect of a stable, asymmetric federation capable of accommodating difference without sliding into fragmentation or perpetual low-level conflict.

The alternative, maintaining the current status quo, risks the very instability that other examples in the region have already suffered.

Correcting the past is ultimately the right course, both morally and politically, rather than allowing old grievances to breed new and more dangerous ones. The choice remains open, yet the window for a constructive settlement will not stay open indefinitely.

James Chin is currently Professor of Asian Studies at the University of Tasmania in Hobart, Australia. He served as the inaugural Director of the Asia Institute Tasmania at UTAS and was the founding Head of the School of Arts and Social Sciences at Monash University’s Malaysia campus. He has also been a Senior Visiting Research Fellow at the Institute of Southeast Asian Studies (ISEAS) in Singapore and a Visiting Professor at Universiti Putra Malaysia. Awarded the U.S. International Visitors Programme, he delivered a series of lectures, including at Stanford University. He is currently Vice-President of the Australian Institute of International Affairs (Tasmania).

Image: Sarawak State Legislative Assembly Building from Darul Hana Bridge, Kuching, Sarawak. Credit: Fabio Achilli/Flickr.