New Indonesian capital could end Putrajaya’s economic grip on Sabah, Sarawak

A Sabah-based political activist has warned Putrajaya of the possibility that it could lose its economic clout over East Malaysian states once the Indonesian capital is relocated to Kalimantan.

(FMT) – Zainnal Ajamain said if the federal government did not play it right, an economic shift would occur in Sabah and Sarawak that would benefit East Kalimantan more than Putrajaya.

“And once the economic shift is in motion, a political shift will follow,” he added.

He 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.

He gave the example of the rice trade under Padiberas Nasional Berhad (Bernas), which he said had been raking in billions of ringgit with its monopoly in Sabah.

He acknowledged that the Pakatan Harapan government had been trying to break the monopoly but said these these were dubious efforts, adding that Bernas and Putrajaya were engaged in a turf war and would eventually decide on how the spoils would be divided.

Indonesia’s president, Joko Widodo, has said that his government could move the country’s capital to Kalimantan as early as in 2024.

Both the Sabah and Sarawak chief ministers have welcomed the move, saying it would greatly benefit both states.

Sabah Chief Minister Shafie Apdal described Indonesia as an “economic powerhouse” and said the move could have a “major economic impact” on the two states.

Zainnal said Sabah’s dependence on Putrajaya for certain imported goods had resulted in the state’s inability to fight for its rights.

“Dependency creates control,” he said. “For example, if the federal government were to stop the import of rice into Sabah, the people would starve within two months.”

He said this was why it was highly possible that Sabah and Sarawak would start barter trading with Indonesia since barter trade falls under the purview of the two states.