North Borneo Federation
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The North Borneo Federation, also known as North Kalimantan or Negara Kesatuan Kalimantan Utara in Malay was a proposed political entity which would have comprised the British Colonies of Sarawak, British North Borneo (now known as the Malaysian state of Sabah) and the protectorate of Brunei.
In 1956, the governments of Sarawak, North Borneo and the State of Brunei announced that they would abandon the Malayan dollar and adopt a common currency of their own, but that never came into being.
The idea of the North Kalimantan was originally proposed by Brunei's People Party President, A. M. Azahari, who had forged links with Sukarno's nationalist movement, together with Ahmad Zaidi, in Java in the 1940s. The idea supported and propagated the unification of all Borneo territories under British rule to form an independent leftist North Kalimantan state.
However, the Brunei People’s Party was in favour of joining Malaysia on the condition it was as the unified three territories of northern Borneo with their own Sultan, and hence was strong enough to resist domination by Malaya, Singapore, Malay administrators or Chinese merchants.
The North Kalimantan (or Kalimantan Utara) proposal was seen as a post-decolonization alternative by local opposition against the Malaysia plan. Local opposition throughout the Borneo territories was primarily based on economic, political, historical and cultural differences between the Borneo states and Malaya, as well as the refusal to be subjected under peninsular political domination. Joining to form Malaysia was seen as a new form of colonialism under Malaya.
The basic concept behind the formation of a union of British Borneo was partly based upon the Federation of Rhodesia and Nyasaland in Southern Africa. After the defeat of the revolutionaries in the Brunei Revolt, the idea was put to rest. Had the federation been formed, the capital city would probably have been chosen from Kuching (capital of Sarawak), Jesselton (present-day Kota Kinabalu, capital of Sabah) or Bandar Brunei (present-day Bandar Seri Begawan, capital of Brunei and the historical capital of the region).
The Sultanate of Brunei has traditionally opposed such a federation. When it was first proposed during the 1960s the Sultan of Brunei favoured joining Malaysia, though, in the end, disagreements concerning the nature of such a federation, and also disputes over oil royalties stopped this from happening.
Currently, there still remain groups of people who favour the creation of such an independent state and desire separation from the rest of Malaysia. These groups see union of Malaysia as unfair to the people of Borneo, particularly Sabah, as the majority of the region's wealth goes to the Malaysian federal government. Only about 5% of the region's oil revenues go to the state government of Sabah and Sarawak. The federal government has taken 15% and other 80% goes to Petronas.
Malaysian politics have usually been centred in Peninsular Malaysia, and critics see the federation neglecting the needs of East Malaysians. Some opposition parties in the Sarawak State Legislative Assembly have tried to promote a North Borneo federation. The matter was refused to be debated in the Assembly due to its sensitivity, by the coalition of governing parties in Sarawak, namely the Barisan Nasional led by Abdul Taib Mahmud.
The Malaysian general elections in 2008 and 2013 saw the populations of both the East Malaysian states voted to keep the ruling Barisan Nasional coalition in power, which lost support in its traditional Peninsular Malaysian strongholds. This has seen an increase in development in the two states.
- G.M. Watson and S. Caine, Report on the Establishment of a Central Bank in Malaya (Kuala Lumpur, 1956), 1
- Pocock p. 129