Tuesday, 13 August 2024 – In this webinar, Dr Tricia Yeoh and Dr Arnold Puyok shared their views on federal-state relations under the Anwar Ibrahim-led Madani administration and the upcoming Sabah state elections.
MALAYSIA STUDIES PROGRAMME WEBINAR
Federal-state relations in Malaysia today are more dynamic than ever before, with states having changed leadership several times following the 2022 general election and several state-level elections between 2020 and 2023. The Malaysia Studies Programme at ISEAS organised a webinar with speakers Dr Tricia Yeoh and Dr Arnold Puyok to take stock of the federal-state relations under the Madani administration and assess Sabah’s political context and outlook in light of the upcoming Sabah state elections in 2025. Dr Tricia Yeoh is Visiting Senior Fellow at ISEAS-Yusof Ishak Institute and CEO of the Institute for Democracy and Economic Affairs (IDEAS) Malaysia. Dr Arnold Puyok is Deputy Dean and Senior Lecturer in Politics and Government Studies at Universiti Malaysia Sarawak’s Faculty of Social Sciences and Humanities. He was also Visiting Senior Fellow at ISEAS-Yusof Ishak Institute.
Dr Tricia Yeoh began by providing a background of the status of state governments today and federal-state relations under the Madani administration. The Unity Government comprising Pakatan Harapan and Barisan Nasional (PHBN) controls six states: Penang, Perak, Selangor, Pahang, Melaka and Neggeri Sembilan; Perikatan Nasional (PN) controls four states: Perlis, Kedah, Kelantan and Terengganu. For Johor, BN has control and PH is in the opposition at the state level while Sarawak is ruled by GPS and Sabah by GRS. She pointed out that Johor, Sabah and Sarawak have joined PH to form the Unity Government at the federal level but not at the state level. Dr Yeoh then proposed to evaluate the performance of the Unity Government against PH and BN’s GE15 manifesto commitments even if it is a new government. She noted that there is a strong emphasis politically on Sabah and Sarawak. General federal-state commitments are minimal—PH’s manifesto included a point on increasing Ecological Fiscal Transfers (EFTs) by RM1 billion to states while BN included a commitment to study partial devolution of power from the federal government to state governments to increase efficiency and strengthen federal-state spirit, which Dr Yeoh considered a form of concession given the pressures they were facing.
Dr Yeoh then moved on to the administrative, fiscal and political institutions and frameworks. She went through Schedule 9 of the Federal Constitution 1957 which lists policy areas pertaining to federal and state governments, but noted that the federal government tended to dominate in decision-making for items on the concurrent list. She then provided an overview of administrative developments. Key developments include the MA63 Working Committee identifying areas of authority in education and healthcare to be decentralised in Sabah and Sarawak and announcing a handover of Sabah Electricity to the Sabah state government. Another significant initiative is the Madani Village Community Committee under the watch of Zahid Hamidi which she said was in reality a parallel federal-level set-up within “opposition” states like Sabah to “eradicate rural poverty” but was rejected by the Sabah state government. Moving on to fiscal developments, Dr Yeoh observed that while federal-state transfers have increased, as a percentage of total federal budget it has remained miniscule. States are demanding increased transfers and the federal government responded with a statement on 12 June 2024, referring to and re-iterating what is laid out in the constitution. The federal government has increased EFTs from RM70 million (2022) to RM200 million (2024) and has increased allocation to Sabah from RM12.9 billion to RM16 billion (2022 to 2024). Dr Yeoh then spoke about political developments. Sabah and Sarawak want representation in parliament increased to 35 per cent, full devolution of power on education with full federal funding and asked for equal funding to all religious bodies. Looking ahead, Dr Yeoh pointed out that federal and state elections are held separately, there is an increased focus on states and state issues as well as on State Chief Ministers such as Terengganu’s Dr Ahmad Samsuri Mokhtar, Kedah’s Muhammad Sanusi and Sarawak’s Abang Johari Openg.
Concluding her presentation, Dr Yeoh noted that states are increasingly demanding policy autonomy and greater share of revenue and gaining strength from each other. She also said that GPS and GRS are required to maintain the Unity Government. She argued that a comprehensive federal-state deliberative platform is required to ensure disputes can be reasonably resolved. States also need to collectively and comprehensively re-evaluate their demands instead of doing so individually.
The webinar then focused on Sabah, where Dr Arnold Puyok provided an analysis of the key players, critical issues, potential scenarios and implications in the battle for Sabah. The Sabah State Legislative Assembly’s current term is ending in December 2025 but early election speculation is widespread. He noted that the ruling coalition GRS faces challenges from UMNO and Parti Warisan.
He first explored Sabah’s demographics and historical political fluidity. While ethnicity is not the main factor, he said that it plays a role in politics. In 2021, Sabah was elevated to a Borneo State, which gives it recognition as “equal partner” in Malaysia as per MA63. He also highlighted Sabah’s turbulent political history with the state changing governments more than five times, partly owing to Sabah’s relatively more open politics. Then, he examined challenges that major political entities like GRS, UMNO and Warisan face. For Gagasan, a major challenge is the lack of a strong ideological foundation and limited support from the Kadazandusun community. Parti Bersatu Sabah (PBS) like many other parties in Sabah has been criticised for failing to appeal to younger voters. Parti Solidariti Tanah Airku (STAR) known for nationalist views and advocacy for MA63 faces the main geographical limitations in expanding influence. UMNO is affected by factional issues which could derail its plans to regain power. Under Pakatan Harapan, Dr Puyok said that PKR lacks strong leadership but is supported by the urban working class and some younger voters; DAP faces the challenge of being labelled as “parti Malaya”; UPKO faces challenges from PBS and STAR and lacks active representation in public issues. On standalone parties, Warisan faces challenges in expanding beyond the East Coast and Kadazandusun areas but struggles with internal dissatisfaction and declining support in certain areas. KDM, Dr Puyok said, is a party to watch in the upcoming elections. Though small, it shows promise in areas with Murut and Rungus areas and is seen as a fresh alternative to PBS and STAR in these areas.
Dr Puyok then discussed critical issues. With regards to infrastructure and development, he touched on economic disparities and development concerns, Sabah lagging in infrastructure development compared to Sarawak, the pan Borneo highway’s slow progress affecting investor confidence and frequent disruptions and shortages in electricity and water supply. He observed that the opposition could use these issues to challenge GRS. Another critical issue is the MA63 debate over Sabah’s 40 per cent revenue entitlement. GRS has been criticised for not pressuring the federal government and this issue could become a major point of contention in the election. Looking ahead at potential scenarios, Dr Puyok said that GRS could collaborate with Warisan to emphasise local solidarity. UMNO could also collaborate with PH to leverage their federal-level pact. However, he said a likely scenario would be GRS, UMNO and PH forming a pact to eliminate Warisan as a contender. Yet another scenario would be GRS, UMNO, PH and smaller parties competing openly, deciding on coalitions after the election results.
Dr Puyok summed up by saying that the election’s outcome will have significant consequences for Sabah’s political trajectory. If GRS maintains federal support, a dominant, unified coalition could govern Sabah, similar to Sarawak’s political climate. Sabah’s politics being less isolated and more influenced by Peninsular Malaysia however makes it challenging for GRS to remain independent without federal intervention. Thus, national trends and developments will continue to shape Sabah’s political environment.
The webinar proceeded to a Q&A session. Both speakers fielded questions covering revenue sources for state governments, where nominated assembly people in the state assembly come from and how it affects the balance of power, role models for Malaysia to enhance federal-state relations, what new areas state governments might venture into, new leaders in Sabah and the different interpretations of ethnic groups on the state- and federal-level. Senior Fellow and Coordinator of the Malaysia Studies programme Dr Francis Hutchinson moderated this webinar, which was attended by 70 people.