New Indonesian capital is a double-edged sword for Malaysia: ex-minister

KOTA KINABALU, Sep 6, 2019, FMT. Former chief minister Yong Teck Lee is optimistic the relocation of Indonesia’s capital to Kalimantan will bring more good than harm to Sabah but cautions it can also be a double-edged sword, reported the Free Malaysia Today.

Yong said the overlapping claims of Malaysia and Indonesia to the Sulawesi sea, off the islands of Sebatik and Sipadan, bordering north Kalimantan still remained unresolved.

He said upon the Malaysian victory at the International Court of Justice in 2002 when Malaysia was awarded the Sipadan and Ligitan islands, the overlapping claims and dispute had been put on the back burner.

Both Malaysia and Indonesia had respectively awarded oil exploration rights to companies in the maritime area concerned, he added.

“The new location of the Indonesian capital at Kalimantan might bring this overlapping claim to the fore and become a hot potato in bilateral relations in the years ahead,” he said.

Indonesian president Joko Widodo has said his government could move the country’s capital from Jakarta to Kalimantan as early as 2024.

Yong said one of the benefits to Malaysia would be that the new Indonesian capital could help reverse the flow of Indonesian illegal migrants into Sabah.

“This is the push-pull economic factor of human migration that is a natural phenomenon in world history. At Kalimantan, from my observation, this reverse flow of migrants is nothing new,” he said.

For example, he said, during a visit to Balikpapan years ago, he met four shop assistants, who previously worked at a superstore in Sabah’s capital, but now were happy being in Kalimantan.

“At an oil palm estate in neighbouring Nunukan, several estate supervisors are ‘ex-Malaysians’ who are now rather prosperous in Kalimantan.

“The economic spillover, in terms of trade in consumer goods, construction materials, quarry stones and cement, will continue to grow in the decades ahead,” Yong said.

Yong said Sabah’s ports in Tawau and Lahad Datu would have to be greatly upgraded if the state were to take advantage of the surge in construction activities in Kalimantan.

At the same time, the Sebatik island, off Tawau, could be developed as an entrepot for transhipment and repackaging of goods from other countries to Indonesia, he added.

This is because Sebatik island is shared by Malaysia (northern portion) and Indonesia (southern portion).

“All these trade activities will bring about more connectivity in transport in the region. As Indonesia is a maritime nation, Sabah will need to boost up our own maritime sector, which is sadly primitive compared with Indonesia and Philippines,” he said.

Yong said one reason why the Kalimantan provinces were able to grow and progress was the granting of autonomy to them. He said this process started after the Suharto-era following the Asian financial crisis of 1998.

“Therefore, now more than ever, we have to re-learn the concept of ‘prosper thy neighbour’ that was first promoted by our prime minister in the 1990s during the establishment of BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines – East Asean Growth Area).”

He added the closer economic integration between Sabah and Kalimantan should not be a cause of concern to the Malaysian authorities because such a prospect in Borneo had already been envisaged when BIMP-EAGA was conceived more than 20 years ago.

Meanwhile, Universiti Malaysia Sabah senior lecturer Lee Kuok Tiung said Sabah and Sarawak would benefit mostly in terms of security.

He said this was because Indonesia would increase border security in Kalimantan.

“Indirectly, Malaysia will benefit from this, especially Sabah which has long-standing problems with cross-border crimes and threats from terrorist groups from the Philippines,” he told FMT.

This coverage would be true at least up to north Kalimantan which bordered districts in Sabah’s east coast, particularly Tawau, he added.

Lee was unsure whether Putrajaya would lose its economic clout over Sabah and Sarawak because of the new Indonesian capital, as claimed by activist Zainnal Ajamain recently.

“Import and export (to Sabah and Sarawak) are controlled by the cabotage policy, which is our main problem. As long as Sabah and Sarawak receive 5% oil royalty and the federal government takes almost all of the taxes from both states, then Putrajaya will still be in control,” he said.

Zainnal had said there was a great possibility that Sabah and Sarawak would opt for barter trading with Indonesia to fight monopolies on certain goods in the two states, which he blamed on Putrajaya.

But one thing certain, Lee said, was the potential economic flow between Sabah and Kalimantan, as well as with Sarawak.

“If everyone plays their cards right, Borneo, which is the third biggest island in the world, is in the running to be an economic powerhouse in its own right,” he said.