MA63, Sabah & Sarawak – From Agreement to Reality

By Amarjeet Singh @ AJ

Malaysia did not “just happen” on 16 September 1963. It was built on a contract – the Malaysia Agreement 1963 (MA63). That agreement is the reason why Sabah and Sarawak are not just ordinary states, but founding partners with specific rights, protections and promises.

Today, when people in Sabah and Sarawak talk about “MA63”, they are not asking for special treatment. They are simply asking Malaysia to honour the original deal.

1. What Is MA63?

The Malaysia Agreement 1963 is an international treaty signed in London on 9 July 1963. The signatories were:

The United Kingdom
The Federation of Malaya
North Borneo (now Sabah)
Sarawak
Singapore (which later left in 1965)

The agreement laid out the conditions under which Sabah, Sarawak and Singapore would join Malaya to form a new federation called Malaysia. Attached to MA63 were key documents such as:

The Inter-Governmental Committee (IGC) Report, detailing safeguards.
New state constitutions for Sabah and Sarawak.
Arrangements on finance, immigration, religion, language and public service.

In simple terms: no MA63, no Malaysia.

2. Before MA63 – The Road to Malaysia (Quick Story)

After World War II, North Borneo and Sarawak became British colonies. By the late 1950s and early 1960s, the world was moving towards decolonisation and independence.

Tunku Abdul Rahman floated the idea of a new federation – “Malaysia” – to bring together Malaya, Singapore, North Borneo, Sarawak (and initially Brunei). Many in Borneo were cautious: they did not want to replace British rule with domination from Kuala Lumpur.

To test public opinion, the British and Malayan governments set up the Cobbold Commission in 1962. The Commission travelled around North Borneo and Sarawak, gathered views, and concluded that a majority were in favour of Malaysia, but only if there were strong safeguards for local rights and autonomy.

As a result:

The Malaysia Solidarity Consultative Committee discussed terms.
Sabah leaders drafted a 20-Point Memorandum of safeguards.
Sarawak leaders produced an 18-Point Memorandum.

These demands fed into the IGC Report and then into MA63 and the Federal Constitution. That is why Sabah and Sarawak have a different legal and political position compared to the 11 Peninsular states.

3. Sabah & Sarawak Are Not “Just States”

When Malaysia was formed, it was not simply “Malaya adding states”. It was a new partnership:

Malaya (11 states)
Sabah
Sarawak
Singapore

In that sense, Sabah and Sarawak came in as equal partners, not junior members. This idea of “equal partnership” is now widely recognised and echoed in recent legal and political debates.

4. Key Rights, Privileges & Protections for Sabah & Sarawak

4.1 Immigration Autonomy – “Passport Control Within Malaysia”

Only Sabah and Sarawak have the power to:

Control who can enter their territory, including citizens from Peninsular Malaysia.
Issue work permits and employment passes.
Blacklist or refuse entry to individuals.

This power exists under federal law but was promised and protected because of MA63 and the IGC Report. It allows the Borneo states to protect local jobs, demographics and security.

4.2 Land, Forests, Minerals, Oil & Gas

Under the Federal Constitution and related arrangements, land, forests and natural resources in Sabah and Sarawak fall mainly under state control. This includes:

Timber and forestry licences.
Land alienation and native customary rights (NCR/NT).
Rivers, water resources and some hydropower projects.

Oil and gas became more complicated after the Petroleum Development Act 1974, which centralised control in Petronas, with only a 5% cash payment (royalty) to oil-producing states. In recent years, Sarawak has revived its Oil Mining Ordinance and created Petros to reassert greater control and negotiate better terms.

4.3 Fiscal Rights – The Famous “40%” for Sabah

MA63 and the 10th Schedule of the Federal Constitution provide that Sabah is entitled to up to 40% of the net revenue collected by the federal government from the state, after certain deductions.

For decades, this entitlement was not properly honoured, leading to anger and legal action. Recently, the courts have affirmed that this 40% provision is real and payable, and the federal government has signalled it will not appeal, instead working on implementation mechanisms.

This is not “bonus money” – it is part of the original financial deal for Sabah to join Malaysia.

4.4 Special Constitutional Safeguards

Several Articles in the Federal Constitution protect the position of Sabah and Sarawak. These include:

Article 153 – extends the “special position” protection to natives of Sabah and Sarawak, not only Malays in Peninsular Malaysia.
Articles 161 & 161E – deal with:
- Use of English and native languages in Borneo states.
- Restrictions on constitutional amendments affecting Sabah and Sarawak without their consent (for example, changes to immigration, religion, language and native rights).
Separate High Court in Sabah and Sarawak, distinct from the High Court of Malaya.

In plain language: you cannot simply amend key parts of the Constitution affecting Sabah and Sarawak without their agreement. That is a veto-like safeguard built into the system.

4.5 Religion & Language

Under MA63 and related constitutional provisions:

Islam is not imposed as the official state religion of Sabah and Sarawak in the same way as in many Peninsular states.
English was allowed to continue for longer as an official language in administration and courts in Borneo.
Native languages are also recognised and protected.

This preserves the multi-faith, multi-lingual character of Sabah and Sarawak.

4.6 Parliamentary Weight & “One-Third Rule”

When Malaysia was formed, Sabah, Sarawak and (then) Singapore were together given enough parliamentary seats to hold more than one-third of the total in the Dewan Rakyat. This matters because:

Major constitutional amendments require a two-thirds majority.
If Borneo (plus Singapore at that time) held at least one-third, Peninsular Malaysia alone could not push through major changes without them.

Over time, seat numbers and demographics changed, but the original intention was clear: Borneo was meant to be a real counterweight, not a passenger.

5. How Rights Were Eroded – And Why People Are Angry

Over the decades after 1963, several trends hurt Sabah and Sarawak’s sense of partnership:

Centralisation of power and finance in the federal government.
Reduced or unclear payment of revenue entitlements (including the 40% for Sabah).
Stronger role of federal agencies in areas originally intended for state control.
Amendments and policy changes that slowly blurred the “equal partner” status.

Scholars and political leaders from Sabah and Sarawak have described this as a long process of “eroded rights” and “unfulfilled promises”. This is why MA63 is now a hot topic – it is a way to demand that Malaysia returns to the original understanding.

6. Recent Moves to Restore MA63

In the last decade, MA63 has come back to the national agenda:

Formation of MA63 review and implementation committees at federal level.
Constitutional amendments to restore wording that recognises Sabah and Sarawak as distinct regions and founding components, not just ordinary states.
Negotiations over oil and gas control, state sales tax on petroleum and role of Petros in Sarawak.
Legal actions and political pressure over Sabah’s 40% revenue entitlement, with courts recently siding with Sabah and the federal government indicating it will study implementation instead of appealing.
Ongoing discussions on greater autonomy in education and health for Sarawak and Sabah.

The message from Borneo is simple: “We are not asking for more than agreed. We are asking you to honour the agreement.”

7. MA63 & Development – What Does It Enable?

If properly implemented, MA63 can become a powerful development engine for Sabah and Sarawak:

More fiscal space – with proper revenue sharing, states can invest in roads, rural connectivity, education, health and digital infrastructure.
Stronger control over natural resources – allowing long-term planning instead of short-term extraction.
Green energy and industry – hydropower and renewable projects in Sarawak and Sabah can attract high-tech investments.
Better human capital policies – with autonomy in education and skills training, policies can be tailored to local needs and languages.

For Peninsular Malaysia, a stronger Sabah and Sarawak mean a more balanced, more resilient, and more united Malaysia.

8. MA63 for Youth: Simple Analogies

Many young people hear “MA63” but only see it as a political slogan. Here are some simple analogies to make it real.

Analogy 1: The Group Project

Imagine four classmates doing a big project together: one has the laptop and printer (Malaya), one has the lab access (Sabah), one has the camera and editing skills (Sarawak), and one has the script ideas (Singapore).

Because Sabah and Sarawak are bringing special tools and resources, they say:

“We’ll join the project, but we want clear rules.”
“We control how our tools are used.”
“We get a fair share of the marks and credit.”

The written agreement for the group project is MA63. If later the “leader” hogs the marks, ignores the rules and sidelines others, the group will fight. That is exactly how Sabah and Sarawak feel when MA63 is not respected.

Analogy 2: Moving Into a Shared House

Think of Malaysia as a big shared house. Malaya owns the original house. Sabah and Sarawak agree to move in, but only if:

They can still lock their bedroom doors (immigration control).
They can decorate their rooms their own way (language, culture, religion).
They receive a fair share of household budget for bills (revenue sharing).

This written deal is MA63. If suddenly someone takes their keys away, repaints their room without asking, and controls all the money, of course there will be conflict.

Analogy 3: E-Sports Team & Revenue Share

Picture an e-sports team where one player brings a strong sponsor and high-end PC. The team signs a contract that this player will receive a fixed 40% of prize money earned through his resources.

Years later, the team keeps winning but conveniently “forgets” to pay that 40%. The player finally sues to enforce the contract. That is similar to Sabah’s fight for the 40% federal revenue entitlement.

9. Deep-Dive Historical Timeline

Year / Date	Event	Why It Matters for MA63
1946	North Borneo and Sarawak become British Crown Colonies.	Sets the stage for decolonisation and later negotiations on Malaysia.
31 Aug 1957	Federation of Malaya gains independence.	Malaya becomes the “senior” partner in later Malaysia talks.
1961	Tunku Abdul Rahman proposes the formation of “Malaysia”.	Initial idea to merge Malaya, Singapore, Borneo territories and possibly Brunei.
Jan–Aug 1962	Cobbold Commission conducts enquiry in North Borneo & Sarawak and submits its report.	Finds that a majority (with conditions) favour Malaysia; emphasises need for special safeguards for Borneo.
1962–1963	Malaysia Solidarity Consultative Committee and IGC meet; 20-Point (Sabah) and 18-Point (Sarawak) memoranda produced.	These memoranda shape the IGC Report and many safeguards later embedded in MA63 and the Constitution.
9 July 1963	Malaysia Agreement 1963 (MA63) signed in London.	Formal treaty combining Malaya, Singapore, North Borneo and Sarawak into a new federation called Malaysia.
16 Sept 1963	Malaysia is officially formed.	Sabah and Sarawak join as founding partners, not as pre-existing states of Malaya.
1965	Singapore leaves the federation.	One partner exits; Sabah and Sarawak’s role and weight become even more crucial.
1974	Petroleum Development Act (PDA) passed; Petronas created.	Centralises oil & gas rights at the federal level; state oil royalties fixed at 5% – a long-term grievance for Sabah & Sarawak.
1970s–1990s	Wave of centralisation and federal dominance over finance and policy.	Many in Sabah & Sarawak feel their MA63 rights are being slowly eroded.
2010s	MA63 re-emerges as a major political issue.	Political parties in Borneo openly campaign on “restoring MA63” and “equal partner” status.
2018–2020	MA63 review committees set up by federal government; discussions on devolution and revenue.	Formal recognition that historical grievances must be addressed, not ignored.
2021–2022	Constitutional amendments passed to better reflect Sabah and Sarawak’s status within the Federation.	Symbolic but important step in restoring the original spirit of MA63.
Late 2010s–2020s	Sarawak revives Oil Mining Ordinance and creates Petros; asserts state rights over upstream petroleum.	Rebalances power between state and Petronas; increases Sarawak’s say over its own resources.
2020s	Sabah pursues judicial review to enforce its 40% revenue entitlement.	Court rulings affirm that the 40% formula is real and due; the federal government pledges to work on mechanisms instead of appealing.
Future	Ongoing negotiations over education & health autonomy, revenue, and further devolution.	The real test: whether Malaysia can truly become the partnership promised in 1963.

10. Final Thoughts – Honouring the Original Deal

MA63 is not a sentimental slogan. It is a legal contract, an international treaty, and a moral promise. Sabah and Sarawak did not sign up to be “extra states”. They signed up to be partners.

Restoring MA63 does not weaken Malaysia. It strengthens it. When Sabah and Sarawak feel respected, fairly treated, and properly empowered, the whole federation becomes more stable, more united and more prosperous.

The question for all of us – leaders, civil servants, students, voters – is simple:

Do we want a Malaysia that keeps its promises, or one that explains them away?

Amarjeet Singh @ AJ

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