By Lian Cheng
“So I asked (the Federal government) on ‘what basis are you giving (the grant) to us? There must be a specific formula.’ Bukan kamek orang manok diberi gia ajak. Orang Sarawak bukan manok (Sarawakians are not chickens for you to simply give feed). Sarawakians are not chickens). What is your formula? However, they could not provide us the formula. But Insya-Allah, the current government is working on the matter and will give us the formula.” Abang Johari (November 24, 2021)
A defining milestone was reached under the leadership of the Premier of Sarawak, Datuk Patinggi Abang Johari Tun Openg, following the conclusion of an agreement between the Federal government and the Sarawak Government on the special annual grant provided for under Article 112D of the Federal Constitution. Article 112D was instituted at the time of Malaysia’s formation, recognising the comparatively underdeveloped status of Sarawak and Sabah. It mandates that both States are to receive a special grant from the Federal government, with the amount contingent upon the nation’s financial position and subject to review every five years.
The provision states that the grant shall be “in such sums as may be agreed upon between the Government of the Federation and the Government of the State of Sarawak (or Sabah)”. However, as no formula was stipulated, the language has historically left room for negotiation and interpretation, especially regarding the grant’s quantum amount.
The Struggle
In 2019, Abang Johari made a decisive move on a long-standing constitutional issue. He argued that the quantum allocated for Sarawak under the special annual grant provision was no longer tenable, especially in the light of the State’s evolving fiscal demands and its ambition to close the development gap with Peninsular Malaysia. The grant, he contended, fell short of what was needed to support Sarawak’s infrastructure growth and economic advancement.
The State’s demand extended beyond a mere increase in figures. Sarawak sought a formal and structured agreement with the Federal government, one that would establish a transparent and equitable formula to determine the grant’s quantum. This push was consistent with Sarawak’s broader push to assert its rights and reinforce its position within the federation including environmentally sustainable practices, which include adopting advanced technologies and practices that minimise the environmental impact of O&G activities. With Article 112D offering no prescribed formula, both governments submitted their own versions. The absence of a defined mechanism opened space for contestation. In the midst of these negotiations, Abang Johari remained resolute. He maintained that Sarawak’s proposed formula reflected more accurately the realities on the ground and was therefore more equitable than the version put forth by the federal government.
Anchoring his stance in the very text of the Federal Constitution, Abang Johari emphasised that the grant ought to be responsive to the Federal government’s annual revenue performance, rather than be fixed arbitrarily. It was a position grounded in principle, a call for fairness, consistency, and constitutional clarity.
A Short-lived Victory
In parallel with efforts to secure a fairer financial arrangement, Abang Johari also advocated for Sarawak’s inclusion to have a representative on the board of the Inland Revenue Department. For Sarawak, it was a practical step toward ensuring that the State remained consistently informed of the nation’s financial performance, particularly in matters tied to revenue performance.
Through Deputy Prime Minister Dato Sri Fadillah Yusof, who served as coordinator between the Sarawak and federal government, Sarawak conveyed its position, making it unequivocally clear that it would not settle for any arrangement that failed to reflect fairness and equity. The State stood by its proposed formula, insisting on terms that aligned with constitutional principles and the State’s developmental realities.
The position culminated in a major announcement on January 20, 2023, following a meeting of the Malaysia Agreement 1963 (MA63) Technical Committee meeting at the Sarawak Legislative Assembly Complex. At a press conference held shortly after, Prime Minister Datuk Seri Anwar Ibrahim acknowledged the legitimacy of Abang Johari’s formula and announced a revised quantum for the special grant, from RM16 million to RM300 million—a staggering 1,175 per cent increase.
“How can the government not provide the special grant and instead give only RM16 million?” Anwar said. “It makes a mockery of our interpretation of the MA63 agreement.”
The announcement represented a rare moment of consensus—a high point in Sarawak’s financial negotiations with the Federal government. But as would soon become apparent, the victory, while monumental in appearance, would prove to be only temporary.
Long Road Ahead
Just as Sarawakians began to exhale a sigh of relief, a new twist emerged. On September 12, 2024, a press conference held after the Malaysia Agreement 1963 Implementation Action Council (MTPMA63) meeting delivered a development that was both significant and sobering. The meeting, chaired by the Prime Minister at the Sabah International Convention Centre, brought with it an unexpected announcement.
Fadillah revealed that the Action Council had agreed to double the special grant allocation for Sarawak and Sabah, from RM300 million to RM600 million. On the surface, the increase was substantial, signalling a potential shift toward greater financial recognition for Sarawak and Sabah. Yet, Fadillah was careful to characterise the new figure as merely an interim measure. Contrary to earlier statements made by the Prime Minister that suggested a definitive breakthrough, the formula to determine the grant’s permanent quantum had not yet been finalised.
What appeared to be a resolution now revealed itself as a stopgap. The long road to securing a fair, constitutionally grounded arrangement under Article 112D remains ongoing. For Sarawak, the pursuit of an equitable deal, rooted in both principle and precedent, was far from over.
The content featured here is an excerpt from the book “Rise of Sarawak: Abang Johari’s Era of Transformation”, published by Sage Salute Sdn Bhd.
