Tuesday, October 19, 2021

RM2 billion oil ‘coup’ puts Sarawak opposition in further turmoil

Having neutralised political enemies over state rights under MA63, the state's ruling coalition GPS is set for a big win when polls are called.

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When the tsunami of votes for Pakatan Harapan (PH) swept across the country in the 2018 election, the Barisan Nasional (BN) government in Sarawak at the time was one of the few that appeared to survive the onslaught.

Still, the ruling parties were aware of the groundswell sentiments created by the shocking defeat of the BN government and the need to shed all remnants of its former federal ally.

A month after the election, four ruling BN parties in the state decided to quit the coalition, forming instead Gabungan Parti Sarawak (GPS).

It was a much-needed change. Neighbouring Sabah had just voted in Warisan, which came to power on the back of strong rhetoric on restoring the state’s rights under the Malaysia Agreement 1963 (MA63), the document that created the federation.

GPS had been prepared to work with the PH government from the start, given the new ruling coalition’s election promise to quadruple Sarawak’s oil royalties.

But by 2019, after a series of statements from Putrajaya that giving Sarawak 20% royalties was not possible, the state appeared to give up hope.

When PH was in dire need of support during the 2020 power vacuum, it was a foregone conclusion that this would not come from GPS.

It used its powers under its Sales Tax Ordinance to impose a 5% sales tax on Petronas, the national oil company.

That added up to a whopping RM2 billion, more or less compensating for the broken promise of 20% royalties.

The PH government, through Petronas, resisted the payment until the end.

So when it was in dire need of support during the 2020 power vacuum, it was a foregone conclusion that this would not come from GPS whose 18 MPs allowed it to be the kingmaker in federal politics.

Instead, GPS wasted no time backing Muhyiddin Yassin as prime minister.

The support paid off. Just two months after Muhyiddin was sworn in, the national oil firm announced a ceasefire, agreeing to settle the RM2 billion in sales tax owed to Sarawak.

It was a win-win for both GPS and Muhyiddin’s Perikatan Nasional (PN) government.

The opposition’s dilemma

The Petronas settlement was a coup for opposition leaders who had made Sarawak’s oil rights a major issue in election campaigns.

Sarawak politics observer James Chin agrees, saying GPS has every advantage in any upcoming election.

For one, Chief Minister Abang Johari Openg has shown Sarawakians the benefits of being part of the PN government.

The prime minister has also created a special portfolio for Sabah and Sarawak directly under his office, to discuss, among others, MA63.

“Abang Jo has been quite successful as he managed to get Muhyiddin to ask Petronas to withdraw its appeal and pay RM2 billion of the oil and gas sales and tax to the Sarawak government,” Chin told MalaysiaNow recently.

Chief Minister Abang Johari Openg (left) is in a good position to negotiate greater rights for Sarawak. Photo: Bernama

With all signs pointing to a handsome win for GPS in the next polls, he said, Muhyiddin cannot afford to repeat PH’s mistake by dragging his feet on promises to restore Sarawak’s rights under MA63.

This leaves the opposition in a dilemma.

For years, it has used the MA63 issue and targeted former chief minister-turned-governor Abdul Taib Mahmud, the state’s grand old man who wields immense influence in Sarawak politics, to shore up support from Sarawakians especially in the more urban areas.

This time around, it needs a completely new strategy.


Chin said a possible issue for the opposition to play up is Dayakism, the demand for greater political positions for leaders from Dayak backgrounds. Essentially, it is aimed at giving the post of chief minister to a Dayak.

The last time Sarawak was led by a Dayak was from 1966 to 1970, under Tawi Sili. Since then, every chief minister who ruled Sarawak has been of either Melanau or Malay descent.

Dayaks make up more than 40% of Sarawak’s diverse population of three million.

GPS appears ready to head to the negotiation table with Putrajaya from a position of strength.

But with the state opposition fragmented and saddled with trust deficit issues, Chin said GPS might go to the polls with confidence.

“For example, PSB is led by Wong Soon Koh who was the Sarawak second finance minister, and he also managed to get former Sarawak PKR leader Baru Bian. The members of this party are largely made up of splinters.”

Chin said Sarawak PKR is also in a state of confusion.

“This creates bad feelings and bad sentiments among the opposition parties,” he added.

For now, the opposition may have to be content with support from the Chinese, with Chin saying that the Chinese pro-opposition sentiment for either DAP or PSB remains strong.

Meanwhile, GPS appears ready to head to the negotiation table with Putrajaya from a position of strength.

But according to Chin, granting Sarawak’s wishes is not as easy as it might seem.

Putrajaya has to walk a tightrope between restoring Sarawak’s autonomy under Malaysia and ensuring that federal power in the Borneo state is not undermined.

“The demand for more autonomy to control its natural resources and territorial land requires political settlement,” Chin added.

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