In Sarang, a quiet fishing village on Sabah’s northern coast, the mood is far from calm. As water taps run dry and power cuts bite, residents say next weekend’s state election is no ordinary contest – it is a referendum on Sabah’s place inside the Malaysian federation.
“Each time the lights go off, I remember what was promised to us,” said fisherman Johan Toikin, referring to the Malaysia Agreement of 1963 (MA63), under which Sabah ceded 60% of its revenue to the federal government in exchange for wide autonomy and a guaranteed share of federal takings.
Today, Sabah is officially Malaysia’s poorest state, with a 2024 poverty rate of 17.7%, more than three times the national average. That sits uneasily alongside vast oil, gas and timber wealth. Between 2018 and 2024, Petronas generated RM205 billion (US$49.2bn) in petroleum revenue from Sabah – more than a quarter of Malaysia’s total – yet the state has received only about RM23 billion in royalties since 1976.
“‘Equal partners’ was the promise, but if you look at Sabah, it is clear it was never taken seriously,” said blacksmith Jason Labunda, 32. “It’s hard to trust people who only remember us during election season.”
Those grievances exploded into a legal milestone last month, when the High Court in Kota Kinabalu ruled that Sabah has a constitutional right to 40% of federal revenue collected from the state – and that this entitlement is separate from development spending. Former Sabah Law Society president Roger Chin, whose group filed the suit, called it a “clear and unavoidable” obligation for Putrajaya.
Prime Minister Anwar Ibrahim’s government has pledged to honour the 40% principle but has filed a limited appeal, arguing there are “defects” in the judgment. That move has enraged Sabah-based allies, some of whom have pulled support from Anwar’s “Madani” unity coalition, accusing Kuala Lumpur of stalling.
“Sabahans don’t want to be placated. They want what is legally owed to them,” said political analyst Bridget Welsh. “They want the deserved funds for basic needs that have been grossly neglected for decades.”
On the campaign trail, Anwar has urged voters not to “follow your anger” and promised to end Sabah’s chronic water crisis by next year, backed by an extra RM1 billion in federal development spending.
But with 476 candidates from more than a dozen parties chasing 73 seats, analysts warn that a fractured result could again produce a fragile patchwork coalition in Kota Kinabalu – giving Putrajaya room to rebuild influence via local allies, while deepening perceptions in Sabah that both federal and state elites are profiting as ordinary people remain poor.
“If the results disappoint, the blame game will begin,” said University of Malaysia Sabah’s Lee Kuok Tiung. “It will end with enmity and strife.”
