Settle the financial terms of MA63 promptly

Settle the financial terms of MA63 promptly

According to Keesing’s Contemporary Archives Nov 2-9 1963 page 19716, Kuala Lumpur and London Talks on Malaysia – Agreement on Establishment of Federation by Malaya, Singapore, Sarawak, Sabah, it was recorded that “The financial questions previously in dispute between Singapore and Malaya were settled in the following manner: (1) 60 percent of the Federal revenues collected in Singapore would be paid to the Singapore Government and 40% percent to the Federal Government; (2) to assist development in the Borneo territories, Singapore would make available to the Federal Government a 15 year loan of 100,000,000 Malayan dollars, free of interest for the first five years and a 15 –year loan of 50,000,000 Malayan dollars at current market rates to the Federation (i.e. 150,000,000 Malayan dollars in all, or about  £17,500,000 ).”

I am wondering if such financial pledge was properly implemented since 1963 especially Singapore had “left” Malaysia in August 1965.  Also for Sabah case, it was 40% of Federal revenue for Sabah and Singapore was 60%.  Why such discrepancy?

The other pressing question is “ has Malaya fulfilled its pledge to Sabah since 1963?”.   Was it one of the reasons that Singapore “left” Malaysia over such pledges in August, 1965?

So now we have been arguing over the terms and conditions of Malaysia Agreement 63 (MA63) for some years recently.  It is no longer any doubt over that MA 63 had been breached in all sectors for Sabah and Sarawak.

It is very fresh in our mind that minister Nancy Shukri in 2015 pledged to resolve all the breaches but why are we still talking about MA63 heading to no where and no implementation even after 50 years ? Obviously, there has been no good governance since 1963 nationally.  The writing is on the wall.

It maybe some excitement over the latest threat by the Foreign Minister Datuk Anifah Aman to resign from his position and UMNO and his words are “Foreign Minister Datuk Seri Anifah Aman said he will leave Umno immediately if the Prime Minister fails to fulfil his promise to restore Sabah's rights as specified in the Malaysia Agreement 1963 (MA63) that had been inadvertently taken away or eroded under successive Prime Ministers. "I will not even wait for a day to stay in Umno and I will resign from my ministerial post if the Prime Minister breaks his promise.” (DE 4/3/2018).

Despite several verbal promises to restore the rights of MA63 for Sabah and Sarawak by the PM, nothing appears any obvious reality.

What is really holding up such promises? Would any political party coming to power in Putrajaya resolve such promises promptly and adequately in financial terms ?

The rights of MA63 come with attachment of very substantial financial implications in all sectors. Isn’t it a great dilemma that such breaches to be restored would need massive financial settlement? How could Malaysia in its fiscal scenario come up with such massive financial deals which can accumulated to Trillions of Ringgit for Sabah and Sarawak?

Flimsy excuses had been in recent years that nothing is owed to Sabah and Sarawak for decades.

Would such financial records for various components be kept for the purposes of MA63 for decades?

There is always the easy way out for some leaders to stipulate that Federal Government had incurred much expenditure in various sectors for decades but such expenditures are irrelevant as there are incurred for collection of revenue.

Even for the Malaysia Plans 1 to 11, Sabah and Sarawak had been very much short changed into many billions of ringgit based on 13 states instead of 3 portions.  My book “Sabah Wealth – Images of woods power” (2005) does provide such short changed quantity till 2000 but not conclusive.

Another item also in much dispute is the oil and gas resources and the share due to the Borneon States where only 5% was the case.  Even 5% payment of royalties were not supported by details of the working for such payment according to ex State Secretary of Sabah. 5% payment of oil royalties is also dubious if Petroleum Development Act 1974 is challenged as illegal, null and void.

Various Federal taxes had been collected and remitted direct to the Federal coffer for portions of revenue derived from the Borneon states especially from Sabah. 

Even for GST collections in Sabah including those accounted for direct to KL, has Sabah received 40% of such revenue since 2015?

Certain rights of MA63 cannot be quantified. Such rights as freedom of religions and education/English language cannot be given a quantum in terms of financial value.

But certain items like in the MA63 such as 40% of Federal revenue in Sabah, Malaysia development plans (short changes) and autonomy would mean a  lot of financial needs to be implemented for some decades. Such amounts can be very substantial in the range of up to Trillions of Ringgit. Without adequate financial provision, autonomy would be difficult to be implemented.

Whether the Federal Government can afford to pay up past dues depend on its fiscal capabilities or the political will to do so is now sort of exposed by the recent statement by the Finance Ministry as “Malaysia will lose RM416.6bil in revenue if the Goods and Services Tax (GST), tolls, National Higher Education Fund Corp (PTPTN) loans and excise duty were abolished, said Ministry of Finance (MoF) Secretary-General, Tan Sri Dr Mohd Irwan Serigar Abdullah.” 

Such figures given do show us that annual fiscal budgets of around RM300 billions is very far from the real federal revenue.  It would appear that the amount short declared would be up to RM500 b annually.  Even the recent revenue of Petronas is to be queried.

So such long overdue substantial funds to come to Sabah and Sarawak should be held in a State sovereign fund to be maintained and managed transparently by a capable and trustworthy independent body for the purpose of good investment for the much neglected current generation and future generation to keep Malaysia intact.

I look forward to a quick settlement of the long overdue funds of MA63.  It is no longer in any period of negotiation and discussions which has been endless in recent years since 1969/1976.

Joshua Y C Kong 15/3/2018