By Mohd Khairy Abdullah @ DG Henry
SANDAKAN (Sabah, Malaysia), Sept 15 – UPKO Malaysia Information Chief, Dr. Peter Jr Naintin, has stressed that Sabah’s claim to 40 percent of the state’s net revenue is a constitutional right that cannot be delayed or disputed.
“The 40% entitlement is the absolute right of the people of Sabah as enshrined in the Federal Constitution. It is not a gift, not a handout. To delay or deny this right is to deny the very foundation of Malaysia’s formation,” he said in a statement on Sunday.
He reminded that the current special grant provided to Sabah is merely an interim arrangement, while the process of reclaiming the state’s 40% revenue entitlement continues. As a temporary measure, the Federal Government has issued interim special grant payments to the Sabah State Government pending the finalization of a new formula.
Dr. Peter’s statement reignited debate on the implementation of the Malaysia Agreement 1963 (MA63), particularly after the amendment to Article 1(2) of the Federal Constitution on December 14, 2021, which recognized Sabah and Sarawak as equal partners in Malaysia. However, he emphasized that without resolving financial matters, such amendments remain symbolic.
The issue resurfaced on June 3, 2022, when several Sabah Pakatan Harapan (PH) Members of Parliament filed a lawsuit in the High Court, demanding that the Federal Government fulfill its financial obligations under Article 112C and Section 2(1), Part IV, Tenth Schedule of the Constitution.
“This criticism was triggered by former Finance Minister Tengku Zafrul Aziz’s claim that the 40% formula was no longer applicable and had been replaced with a new arrangement. That statement sparked strong reactions from Sabah leaders, including UPKO, who viewed it as an attempt to deny Sabahans their constitutional rights,” Dr. Peter explained.
Since the change of government in December 2022, Prime Minister Datuk Seri Anwar Ibrahim chaired the first MA63 Implementation Action Council meeting in Kuching in January 2023. The meeting introduced new mechanisms, including the MA63 Technical Committee and the Coordinating Committee.
“To date, 13 issues have been resolved, including regulatory powers over gas, electricity, and the judicial administration of Sabah and Sarawak. However, another 13 issues remain under discussion, among them oil royalties, rights to the continental shelf, and Federal financial obligations,” he added.
Dr. Peter further noted that many MA63-related matters have been addressed through high-level meetings and negotiations between Federal and State leaders. “This proves that political and diplomatic engagement is more effective, without the need to drag these matters to court,” he said.
He stressed that strong Federal–State relations remain crucial in driving Sabah’s socio-economic development. The Unity Government, he said, reflects a collaborative effort among Malaysia’s political parties, with its success anchored in trust, cooperation, and strategic engagement across both levels of leadership.
The Federal Government has also increased Sabah’s special grant from RM126 million in 2021 to RM300 million for 2023–2024, with the latest announcement that the amount will be doubled to RM600 million this year. Deputy Prime Minister Datuk Seri Fadillah Yusof previously stated that a decision regarding Sabah’s 40% claim is expected to be announced before Malaysia Day 2025.
Dr. Peter stressed that this issue now serves as a major test of the Unity Government’s credibility, particularly that of Prime Minister Anwar Ibrahim—whether he can fulfill this historic pledge or merely sustain MA63 as political rhetoric.
“For local Sabah-based parties like UPKO, the 40% entitlement is not just a technical demand. It is a defining struggle that determines their legitimacy in the eyes of the people,” he said.
