GEOGRAPHIC BRIEF ON SABAH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84-00825R000100620001-7
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 28
• Document Creation Date: November 16, 2016
• Document Release Date: January 28, 2000
• Sequence Number: 1
• Publication Date: April 1, 1969
• Content Type: IR

Approved For Release 2000/05/31 : CIA-RDP84-00825R0001sTRIV-7
DIRECTORATE OF
INTELLIGENCE
Intelligence Report
Geographic Brief on
Sabah
SECRET
CIA/BGI GR 69-4
Aura 1969
Approved For Release 2000/05/31 : CIA-RDP84-00825R00010U620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP 1
Excluded from aulomollc
downgrading and declassification
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
FOREWORD
Sabah is a state within the Malaysian Federation that has in recent years been
the focus of a dispute between Malaysia and the Republic of the Philippines.
The dispute stems from the Philippine contention that much of Sabah is right-
fully hers?a legally dubious claim based on an 1878 document that either
"leased" or "ceded" the Borneo territory of the Sultan of Sulu to a combine of
European businessmen.
This report provides geographical and historical information for use by per-
sons who must follow or deal with events in Sabah.
SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
CONTENTS
Page
Terrain and Vegetation 1
Marine Approaches
3
Climate
4
Population
5
Size and Distribution
5
Composition
5
Economy
13
Transportation
17
Appendix. Sovereignty Dispute
19
Figures
Page
Figure
1.
Rugged, densely forested terrain in interior Sabah 2
Figure
2.
Fields of wetland rice in intermontane valley
3
Figure
3.
Mean precipitation (table)
4
Figures
4 and 5.
West coast villages
6
Figure
6.
Business section of Kota Kinabalu
7
Figure
7.
Small cargo vessels in Kudat harbor
7
Figure
8.
Sandakan, largest city in the state
7
Figure
9.
Tawau
8
Figure
10.
Freighter unloading cargo in Tawau harbor
8
Figure
11.
Kadazan women in ceremonial attire
10
Figure
12.
Women and children of hill village near Kudat
10
Figure
13.
Logging operations near Lahad Datu
15
Figure
14.
Log ponds near Sandakan
15
Figure
15.
Oil palm estate near Kota Kinabalu
16
Figure
16.
All-weather road which extends along entire west coast
18
Figure
17.
1960 view of road between Tawau and estate at Quoin Hill
18
Map
Following Page
Sabah (75116) 21
SECRET iii
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
April 1969
INTELLIGENCE REPORT
Geographic Brief on Sabah
1. Sabah covers an area of some 29,000 square miles (slightly smaller than the
state of South Carolina) in the northeast corner of the island of Borneo (see
Map 75116). Its 1,000-mile shoreline is washed by three bodies of water?the
South China Sea on the west, the Sulu Sea on the northeast, and the Celebes
Sea on the southeast. Boundaries along generally remote mountainous terrain
separate the state from its Malaysian sister-state of Sarawak to the southwest
and Indonesian Kalimantan to the south. Kota Kinabalu (formerly Jesselton),
the state capital, lies about 900 nautical miles east of Kuala Lumpur, capital of
Malaysia, and about 600 nautical miles southwest of Manila. The nearest island
in the Philippine Sulu chain is some 18 nautical miles off Sabah's southeast coast.
2. Although sovereignty was never questioned during the more than 80 years
of British control, the Philippines has challenged Malaysian ownership of the
territory since Sabah became a state within that federation in 1963 (see Appen-
dix, Sovereignty Dispute, page 21). The state's extensive stands of commercially
exploitable timber probably are an economic attraction to the Philippines, as
they could compensate for the dwindling Philippine timber resources. Perhaps
of greater appeal are Sabah's vast underpopulated tracts, which could provide
resettlement sites for much of the excess population in the increasingly crowded
northern and central Philippine islands. Little land suitable for such homestead-
ing remains in Mindanao, heretofore the major region for resettling landless
peasants from these islands.
TERRAIN AND VEGETATION
3. Rugged terrain is characteristic of Sabah (see Figure 1). A plain up to
10 miles wide extends the full length of the west coast. It is backed by the
Crocker Range which, along with its lateral spurs, forms an extensive block of
undeveloped, sparsely peopled terrain that obstructs surface communication
between the western and eastern parts of the state. Prevailing elevations of
ridgelines in the Crocker Range are generally 3,000 to 4,000 feet above sea
Note: This report was produced by CIA. It was prepared by the Office of Basic and
Geographic Intelligence and coordinated with the Offices of Current Intelligence and Economic
Research.
SECRET 1
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
FIGURE 1. Rugged, densely forested terrain in interior Sabah. Such terrain is a
barrier to the development of transportation between the western and eastern parts
of the state.
level; those of the spur ranges, somewhat less. Individual peaks tower well above
the ridgelines, with Mount Kinabalu, at 13,455 feet, the highest point on Borneo.
The east coast is backed by stretches of heavily forested, poorly drained low-
lands interrupted by better drained but equally densely wooded headlands.
4. About 80 percent of the state is blanketed by tropical evergreen forest.
Nearly impenetrable stretches of mangrove and nipa palm border much of the
coastline, whereas relatively open stands of primary rain forest containing but-
tressed trees up to 6 feet in diameter and 200 feet high occur throughout most
of the interior. Where cultivated plots have been abandoned or trees commer-
cially exploited, tangled "jungles" of secondary growths of smaller trees and
undergrowth have sprung up. Nonforested land is confined to cultivated plots
on the coastal plain along the South China Sea, which are planted to wetland
rice or cash crops, especially rubber; to pockets along the east coast devoted
mostly to cultivation of cash crops; to paddy fields extending through the less
remote intermontane valleys (see Figure 2); and to patches on interior moun-
tain slopes cleared for slash-and-burn farming.
5. The rugged, densely forested terrain prevalent throughout most of interior
Sabah is poorly suited to conventional military operations. Should armed hos-
tility develop between Malaysia and the Philippines, however, such terrain could
2 SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
FIGURE 2. Fields of wetland rice in intermontane valley. Extensive tracts like
these occur in the valleys as well as in the coastal.lowlands. Mount Kinabalu,
which towers to more than 13,000 feet in the background, is shrouded in clouds.
provide numerous havens for small teams engaged in paramilitary operations
against targets in the relatively narrow coastal lowlands.
MARINE APPROACHES
6. The coastline of Sabah is deeply indented, particularly in the northern
and eastern sectors where Marudu Bay, Labuk Bay, Sandakan Harbour, Darvel
Bay, and Cowie Harbour offer excellent anchorages. The major eastern eco-
nomic centers?Sandakan, Lahad Datu, Semporna, and Tawau?are located on
the shores of these indentations.
7. The nature of Sabah's coasts is varied. Sandy beaches suitable for the
landing of conventional amphibious craft are most numerous along the west
coast. Such stretches, up to 6 miles long and 175 yards wide at low tide, prevail
where the ? coastline is straight. They are separated by muddy shores backed
by mangrove swamps along the more sheltered embayments. A sandy beach
particularly well suited to large-scale amphibious landing extends along the
shores of Gaya Bay, north of Kota Kinabalu. Within 2 miles of this beach is
a road parallel to the west coast; access to the road from the beach is over
cleared ground. Eastern Sabah, with fewer stretches of straight coastline, has
correspondingly fewer sandy beaches; muddy shores backed by impenetrable
SECRET 3
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
mangrove swamps are the rule. Few sites are suitable for large-scale amphibious
landings, and penetration in any direction from favorable sites would be pre-
cluded by dense jungle.
8. The many encumbrances off the Sabah coast would further limit large-
scale amphibious operations. Approaches from the Sulu and Celebes Seas, in
particular, present a maze of coral reefs, submerged rocks, sandbars, mudflats,
and shoals. These hazards would not be major deterrents to operations using
small craft, however, particularly when piloted by boatmen familiar with the
local waters. Hundreds of such boatmen steer tteir craft daily through the
encumbered waters of the Sulu Archipelago on their trading missions to Sabah's
eastern ports. Small teams of agents could be infiltrated into Sabah from Sulu
under cover of such missions.
CLIMATE
9. The climate of Sabah is tropical, with little seasonal change. Temperatures
are warm 'the year around but only rarely climb into the middle or upper 90's
(Fahrenheit degrees). Although the area is subject to seasonal changes in pre-
vailing wind direction ( out of the northeast from October to April, out of the
southwest from May to September, indeterminate during the transitional months
of April and September), there is no pronounced wet or dry season as in most
of Southeast Asia. Nor is there a clear pattern of geographical variation in
rainfall. Figure 3 shows mean monthly and annual precipitation for selected
stations.
10. Weather would not normally hinder conventional amphibious operations
against Sabah. It could, however, deter maritime paramilitary operations using
small craft. Although the seas surrounding the state are usually calm, occasional
heavy seas and pounding surf from November through March, particularly off
the west coast, could endanger personnel in such craft. Pilots of small craft
Figure 3. Mean Precipitation
Inches
Station
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Ann
Beaufort
13.2
9.2
10.0
13.8
14.7
11.8
11.6
11.1
15.3
16.4
14.3
13.2
154.6
(5?20'N 115?45'E)
Kota Kinabalu .
6.3
2.8
3.4
5.7
10.0
11.3
9.7
8.8
12.7
15.9
12.2
11.5
110.3
(5?59'N 116?04'E)
Kudat
14.4
8.3
5.8
2.5
4.6
6.1
5.2
5.3
5.6
8.9
12.1
17.9
96.7
(6?53'N 116?50'E)
Lahad Datu
8.9
5.0
5.5
3.9
6.7
6.4
5.5
3.3
5.9
6.6
6.6
8.6
72.9
(5?02'N 118?19'E)
Pensiangan
8.0
6.1
8.8
13.5
15.3
12.7
7.6
8.3
9.9
11.4
9.0
7.7
118.3
(4?33'N 116?19'E)
Ranau
11.5
4.6
5.3
5.0
9.5
7.3
5.1
6.6
7.4
6.2
7.1
9.0
84.6
(5?58'N 116?41'E)
Sandakan
19.0
10.9
8.6
4.5
6.2
7.4
6.7
7.9
9.3
10.2
14.5
18.5
123.7
(5?50'N 118?07'E)
Tawau
4.9
5.2
5.3
5.7
8.6
7.7
9.2
9.2
5.6
5.8
7.2
7.1
81.5
(4?15'N 117?54'E)
4 SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
also would need to be wary of strong tidal currents in the eastern coastal waters,
especially during the period March through May.
11. Air operations would be hindered from time to time by strong winds,
turbulence, cloudiness, low ceilings, and poor visibility caused by heavy rain.
Strong winds?often of gale force?could preclude parachute drops in coastal
areas. Such winds may be related to typhoons that migrate northwestward across
the Philippine Islands, particularly between July and November.
POPULATION
Size and Distribution
12. The population of Sabah in 1960, according to the census, was 454,421.
That figure is estimated to have swelled by the end of 1968 to slightly more than
600,000?about 5.9 percent of the total population of Malaysia. Population
density is about 20 persons per square mile overall, but it varies greatly from
place to place. More than 65 percent of the people live on the western coastal
plain, and most of the remainder are grouped in or near the major towns along
the east coast; the interior is sparsely peopled. Settlement is essentially rural,
with about 85 percent of the people living in towns or villages having populations
of less than 2,000 (see Figures 4 and 5). The principal towns on the western
side of the state and their estimated populations are Victoria (on the island
of Labuan) 4,000, Kota Kinabalu (see Figure 6) 33,000, and Kudat ( see Figure
7) 4,000; on the eastern side are Sandakan (see Figure 8) 40,000, Lahad Datu
2,000, Semporna 2,000, and Tawau (see Figures 9 and 10) 15,000. The eastern
towns have grown rapidly in the past decade, principally because of the booming
timber industry. They are isolated?Semporna and Tawau were not linked by
road until 2 years ago?and must rely on air and sea connections with the
rest of the state.
Composition
13. The size of the individual ethnic communities in 1960 and their percentages
of the total Sabah population are as follows:
POPULATION
ETHIC GROUP Total Percent of Total
Indigenous
Kadazan ( Dusun) 145,229 32.0
Bajau 59,710 13.1
Murut 22,138 4.9
Other* 79,421 17.5
Nonindigenous
Chinese 104,542 23.0
European 1,896 0.4
Other** 41,485 9.1
*Comprises Brunei, Kadayan, Orang Sungei, Bisaya, Sulu, Tidong, and
Sino-native groups.
**Includes highly transient communities of Indonesians and Filipinos.
SECRET 5
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
6
FIGURES 4 and 5. West coast villages. The houses are built over the water, on
stilts, and have roofs of corrugated metal or nipa palm leaves. Coastal villages
such as these are usually occupied by Muslim Bajaus, Orang Sungeis, or Sulus.
SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
FIGURE 6. Business section of Kota Kinabalu, capital of Sabah. Although
prosperous, business is less flourishing in major towns of the west coast
than in towns of the east.
FIGURE 7. Small cargo vessels in
Kudat harbor. Craft such as
these (called kumpits) are used to
smuggle cigarettes and other
commodities into the southern
Philippines.
FIGURE 8. Sandakan, largest city in the state. This eastern port is a major
exporter of timber and agricultural products and also conducts flourishing
barter with small craft from the Philippines.
SECRET 7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
FIGURE 9. Tawau. This southeastern port conducts particularly lucrative barter
with merchants from the neighboring islands of the Philippines and Indonesia.
8
FIGURE 10. Freighter unloading cargo in Tawau harbor. Note the
many small vessels in background.
SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
14. Presumably the total indigenous and total nonindigenous percentages of
the population have remained constant since 1960, although two elements of the
nonindigenous population have changed. The size of the European community,
small at the time of the census, has diminished further with the departure of most
of the expatriates; the size of the "Other Nonindigenous" category has increased
proportionately, as the expatriate European civil servants have been replaced
to a great extent by Malays from West Malaysia.
15. Religious composition of the population, according to the 1960 census, was
37.9 percent Muslim (172,324), 16.6 percent Christian ( 75,247), and 45.5 per-
cent "Other Religions" ( 206,850 )?chiefly animist and Chinese faiths. Most of
the Bajaus, Bruneis, Kedayans, Orang Sungeis, Sulus, and Filipinos are Muslims.
The majority of the Kadazans, Muruts, Bisayas, and Tidongs are animists, al-
though many have been converted to Christianity or Islam. Incorporation of
heavily Muslim Sabah into the Philippines would aggravate that country's
already ticklish problem of controlling its Muslim minority ( about 1,500,000
people, or 4 percent of the total population, largely concentrated in the Sulu-
Mindanao area).
16. Coastal fringes are populated by Bajaus and by some of the groups in
the "Other Indigenous" category?principally Orang Sungeis and Sulus. Most
live in boats or in houses built over the water on stilts. Coastal lowlands and
major intermontane valleys are peopled principally by Kadazans ( see Figure 11)
and to a lesser extent by other groups in the "Other Indigenous" category?
Bruneis, Kedayans, Bisayas, and Tidongs. The rugged mountains are inhabited
by Muruts ( see Figure 12). Most Chinese live in towns.
17. The Bajaus, like the Filipinos, have traditionally moved rather freely be-
tween the islands of the Sulu Archipelago and Sabah and have strong ancestral
ties with the Sulu peoples. Although presumably only natives of Sabah were
included in the nearly 60,000 Bajaus enumerated in the 1960 census, the "locals"
and the itinerant seafarers from the Sulus (both of whom occupy houseboats
along the southeast coast) mix freely and are difficult for a census enumerator
to distinguish. Although counted as one community in 1960, the Bajaus actually
comprise two distinct and geographically separated groups with little contact
between them. Those of the southeast, called "Sea Bajaus," are a seafaring people
who live along the shores of Darvel Bay between Lahad Datu and Semporna,
with most occupying small boats the year round, fishing and trading in the bay
and around the nearby Sulu Islands. The other Bajau group lives along the west
coast between Kudat and Papar. Even though they commonly live in villages
built on stilts out over the water, most of this group are farmers; hence the
term "Land Bajau." Contacts with their ancestral homes in the Sulus are minimal,
and growth of the community by immigration is slight.
18. A chronic labor shortage on the rubber and timber estates of eastern
Sabah has been responsible for large-scale immigration into Sabah. The domestic
labor force is small because most people are subsistence farmers. It also lacks
mobility, so even though laborers may be unemployed in the west, eastern
SECRET 9
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
FIGURE 11. Kadazan women in ceremonial attire. Kadazans form the largest ethnic
group in the state. Unlike their Murut neighbors in the interior, many have been
converted to Christianity or Islam and most are cultivators of wetland rice.
FIGURE 12. Women and children?probably Muruts?of hill village near Kudat. Such
primitive peoples, who comprise only a small percentage of the population, are
animists and practice slash-and-burn agriculture.
10
SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
employers have had to hire from abroad. China and Hong Kong have traditionally
supplied most of the alien laborers; many of them remained, as evidenced by
the large number of Chinese in the state today. Because of Government fear of
Communist subversion by Chinese immigrants, however, recruitment from China
has ceased during the past two decades, and Indonesia and the Philippines have
become the major suppliers. Immigration of Indonesians and Filipinos, like that
of Chinese, has been fraught with political problems. Entry of Indonesians was
curtailed during the Malaysia-Indonesia "confrontation" of 1963-66, and entry
of Filipinos has been restricted ( but not yet eliminated) during the past year
or so. Because of the political problems associated with the importation of laborers
from abroad, Malaysian officials have endeavored to promote the flow of workers
from West Malaysia ( where the unemployment rate is rising) to Sabah. Rubber
tappers, in particular, have been encouraged to migrate. A Malaysian Migra-
tion Fund Board was established in 1966 to recruit and assist laborers to go to
Sabah, but its efforts have produced only a trickle of workers into the state.
Some of Sabah's indigenous political leaders have discouraged the Malaysian
migration program because they fear that its real objective is the political,
economic, and cultural subjugation of the state by West Malaysia.
19. Javanese formerly were the largest element of the Indonesian labor force in
Sabah. Today, however, few Javanese remain. Of the 25,000 to 30,000 Indonesians
currently estimated to reside in the state, most are from Kalimantan, Sulawesi
(Celebes), and Timor. Although earlier Javanese laborers were recruited by
Sabah employers, present-day Indonesian workers migrate voluntarily to the
Sabah estates. Almost all Indonesians remain only a year or two, acquire a nest-
egg, and then return home. The Timorese, who constitute perhaps half of the
Indonesian community, reportedly are sent the 900 miles north by their Catholic
pastors to earn dowries before returning home to waiting brides. Most of the
Indonesians work and live on the eastern timber, rubber, and oil palm estates,
with the largest community centered on Tawau. There is little contact between
immigrant Indonesians and indigenous people; nor is there much contact among
the various Indonesian groups ( such as the Bugis and Makasarese from Sulawesi,
or the Timorese). The Indonesians do not engage in local politics, and those
who remained in Sabah during "confrontation" were impervious to Indonesian
attempts to subvert them.
20. The number of Filipinos in Sabah is estimated at 25,000 to 30,000?about
the same as the number of Indonesians. Members of the Filipino community
who were born in Sabah are difficult to distinguish from those who are citizens
of the Philippines. For most, however, the Sulu Islands are the ancestral home.*
The majority are transient laborers who, like the Indonesians, come to eastern
Sabah to work on timber concessions, rubber and oil palm estates, or public
works gangs, then return home after acquiring a nestegg. The timber conces-
sionaires formerly recruited labor in the Philippines, but depressed economic
*The 1960 census recorded 11,080 Sulus in Sabah, which included only those of Sulu
ancestry who were born in the state. The Sabah Controller of Immigration, in a September
1968 news conference, claimed that there were 21,209 Filipinos in the state.
SECRET 11
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
conditions in the Sulus combined with the booming economy of Sabah now pro-
vide the impetus for voluntary migrations. The better economic conditions in
Sabah, moreover, have encouraged many of the migrants from the Sulus to
remain in Sabah, and the second-generation Filipino community in the state
is now substantial. Increasing numbers of Filipinos, particularly among the second
generation, are becoming Malaysian citizens.
21. There is a substantial Christian minority in the Filipino community in
Sabah; in July 1968 the American Consul at Kuching, Sarawak, estimated that
as many as 10,000 were of that faith. Christian Filipinos are of obscure origin,
but presumably they came from neighboring regions in the Philippines?Mindanao
and Palawan as well as the islands of the Sulus. Unlike Muslim Filipinos, who
assimilate with relative ease, Christian Filipinos have no significant ties with
any ethnic community in Sabah and, consequently, form a distinctive community.
Many of them are active in the Philippine Association, a communal protective
and patriotic organization with only a minority of Muslim members. ( The as-
sociation emphatically opposes the Philippine claim to Sabah.) Christians gen-
erally have better paying jobs than their Muslim brethren; many who hold
Malaysian citizenship occupy senior civil service positions, especially in the
Public Works, Education, and Forestry Departments.* Few of the transient
laborers are believed to be Christian.
22. Although some Filipinos in Sabah claim that they are discriminated against
in job promotion, most are content, politically impassive, and not regarded by
Malaysian officials as a serious subversive threat. Attitudes among the Filipinos
in Sabah toward the Philippine claim to the state are impossible to gage. In view
of the ancestral connections that most of them have with the Sulu Islands, where
grievances with the Philippine Government are longstanding, few Sabah Fili-
pinos are likely to sympathize with the Philippine claim.** Thus, although Philip-
pine agents could easily infiltrate into Sabah, they would be unlikely to gain
significant support from the Filipinos resident there. Furthermore, even if such
sympathies were to develop among the Sabah Filipinos, desire to avoid political
involvement so as not to provide the Malaysian Government with grounds for
expulsion or internment would discourage open support for the claim.
23. If the Filipino community were to become more sympathetic to the Philip-
pine claim, Malaysian authorities would probably consider expulsion of transient
laborers and relocation of permanent residents into "new villages," as was done
with large numbers of Chinese during the Communist emergency in Malaya in
the 1950's and in Sarawak during the Indonesian "confrontation." Such actions
*Tun Mustapha, Chief Minister of Sabah, was formerly a citizen of the Philippines, claiming
birth on Cagayan Sulu Island, 150 miles or so northwest of the main Sulu group. He re-
portedly has relatives in Job o arid in the Tawi Tawi island group.
**Little sentiment has been generated in the Sulus for the Philippine claim, according to
a US Embassy officer who traveled through the archipelago in early 1968. He believes, how-
ever, that underemployed or disaffected individuals on both sides of the boundary could
probably be recruited for armed action in support of the claim.
12 SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
would be difficult and expensive, however, because of the scattered distribution
of the people, and they would be disruptive economically because of the heavy
reliance on the Filipino labor force. Transient Filipino laborers now in Sabah
are likely to be permitted to apply for renewal of work passes after expiry, and
the influx of Filipinos, although it probably will be more tightly controlled, is
likely to continue for some time.
ECONOMY
24. Sabah's economy is based on the extraction of timber and the cultivation
of cash crops. Forty to forty-five percent of the state's rice requirements must
be imported. Industry is confined to processing products for export and to pre-
paring foodstuffs and consumer goods for local markets.
25. A marked disparity between west and east characterizes the economic
development of Sabah. The western economy developed during the first half
of this century, based on the rubber industry, and has stagnated in recent years
with the decline in rubber prices on the world market. This region is relatively
well populated, has a number of fair-sized towns, and has adequate transpor-
tation facilities.
26. The economy of eastern Sabah, in contrast, is booming. The treMendous
growth of the timber industry in the past two decades is reflected in the pros-
perous and bustling coastal towns of Sandakan, Lahad Datu, Sempoma, and
Tawau. Cargo vessels, some to be loaded with timber or agricultural products
of the hinterland and others carrying goods illicitly between Sabah and Indo-
nesia or the Philippines, jam their harbors. Because of the recency of economic
development and the still inadequate transportation network, however, much
of the eastern region, like the interior, remains undeveloped and has untapped
resources.
27. Large foreign-owned companies, mostly British, have long dominated the
economy of eastern Sabah. Chief among them is Harrisons & Crosfield, a British
firm that has maintained economic preeminence in the state for more than 50
years. It controls timber concessions, rubber, palm oil, and copra estates and
also has importing rights for European and US products. Competition from
other concerns, however, is growing. The eastern businessmen (mostly Chinese)
generally resent the western-based state government, as they feel that it milks
revenues from resources of the east to benefit the west.*
28. In 1967, timber accounted for 77.3 percent of the state's export earnings,
having risen from only 8 percent in 1950 and 41 percent in 1960. This rise
was primarily at the expense of rubber, which had accounted for 71 percent of
the export earnings in 1950, dropped to 22 percent in 1960, and sunk to only
6.4 percent in 1967. Palm oil and copra, along with rubber, are minor con-
*Similarly, a feeling prevails throughout Sabah that the Federal Government in Kuala
Lumpur extracts revenues from the state without proportional return in terms of economic
and social development.
SECRET 13
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
tributors to the state's economy. Fish products and agricultural commodities
such as abaca and cocoa account for most of the remaining income.
29. Sabah is rich in timber reserves ( see Figures 13 and 14). Logging is
concentrated largely in the east among British and US concessions. Most of the
logs are exported to Japan, but some go to other Asian countries as well as to
Australia, Europe, and the United States. Sabah supplies more than one-fourth
of the world's exports of hardwood logs; softwood varieties for plywood and
pulp are also extracted. Because skilled labor and cheap power are in short
supply, little of the timber is converted to finished products. Efforts are being
made to introduce local processing, however, in order to diversify the markets
and broaden the base of the state's economy.
30. Rubber production has remained steady in recent years ( an average of
somewhat more than 23,000 tons annually). Although still the chief agricultural
export, rubber's relative contribution to export earnings has declined because
of falling prices and the tremendous increase in timber production. Much of the
mature rubber remains untapped, and expansion of the industry has been
thwarted by a shortage of tappers. Replanting of high-yield trees has been
slow. An increasing number of estates are becoming moribund, and smallholdings
have surpassed large plantations in total acreage and production. Most rubber
is cultivated on the western coastal plain, but some is grown near Sandakan
and Tawau.
31. Oil palm, first planted in Sabah in 1958 as part of a Government program
to diversify the economy, is expected to become a significant earner of foreign
exchange in the next few years ( see Figure 15). Although the 1967 production
of 9,620 tons of palm oil accounted for only 1.5 percent of export earnings,
acreage is rapidly expanding and, if current sharp price declines do not continue,
the crop is expected to overtake rubber as the major agricultural export by the
early 1970's. Palm oil is produced both on smallholder plots and on estates. Most
of the production comes from several large estates near Sandakan and in the
Labuk Valley.
32. Copra is produced from coconuts grown on small holdings and estates
along the coast, particularly in the West Coast and Tawau Residencies. In 1967
Sabah exported 13,831 tons, a substantial decline from the previous year. Export
figures include not only domestic production but also re-exports of copra
acquired by barter in eastern ports (principally Tawau) with merchants from
Indonesia and the Philippines. The volume of such trade depends on prevailing
political relations between Malaysia and these two countries as well as on
economic conditions within Indonesia or the Philippines. During "confrontation,"
for example, the amount of copra brought into Sabah from Indonesia diminished
(although not substantially). The 1967 decline was due largely to more stringent
controls imposed by Indonesia on the movement of agricultural commodities,
including copra, from Sulawesi and Kalimantan to Sabah. Such illegal traffic
creates a significant revenue loss for Indonesia. Although figures are not yet
available, copra exports from Sabah may have dropped further in 1968, reflect-
14 SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
FIGURE 13. Logging operations near Lahad Datu.
FIGURE 14. Log ponds near Sandakan. Although most timber is ex-
ported as logs, some is processed in the state, as evidenced by the
sawmills in this photograph.
SECRET
15
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
FIGURE 15. Oil palm estate near Kota Kinabalu. Oil palm is grown in both the
western and eastern parts of the state, but most large estates are in the east. The
crop is expected to contribute significantly to the state's economy in the next few years.
ing the decline in barter after the implementation of the antismuggling agree-
ment with the Philippines.
33. Extensive mineral resources have long been thought to be hidden in
Sabah's vast unexplored tracts, but surveys have uncovered only one economically
exploitable deposit. The surveys have not been exhaustive, however, and further
investigations?particularly in the Labuk Valley where conditions for mineraliza-
tion appear to be favorable?may reveal additional minerals in commercially
exploitable quantities. A Japanese firm has been awarded mining rights for the
lone exploitable deposit so far discovered, located on the southeastern slopes of
Mount Kinabalu, ?about 48 miles east of Kota Kinabalu. Geological and geo-
physical surveys and borings indicate a substantial vein of copper with asso-
ciated tracings of gold, zinc, molybdenum, and mercury. The company hopes
to begin mining copper within the next 2 years.
34. Unlike neighboring Brunei, Sarawak, and Kalimantan, Sabah has no pro-
ducing petroleum fields. Various international interests?principally Esso and
Shell but also French and Japanese firms?however, have undertaken offshore
and coastal exploration in recent years. Prospects to date are indeterminate.
35. The Philippines for years has had to contend with the smuggling of goods
(principally US cigarettes) from Sabah, with resultant loss of revenue to Philip-
pine customs. Malaysia considers such trade to be legal, and Chinese business-
men in Sabah's eastern ports have long profited from providing the contraband
(mostly reexported from Hong Kong) for the smugglers. Nevertheless, Malaysia
16 SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
agreed to sign an antismuggling pact with the Philippines in 1967.* The pact
placed Philippine customs stations in Sandakan, Semporna, and Kota Kinabalu
and was followed by Malaysia's establishment of a border pass system that
allowed the holder a 2-week stay in the state without visa. Despite such controls,
smuggling continued to flourish. By the autumn of 1968, sizable numbers of
Sulu traders were still visiting Sabah's eastern ports to trade or sell their goods,
although they were encountering difficulty in obtaining permits from Sabah
authorities to leave the harbor areas and enter the towns. With the deterioration
of relations with the Philippines, Malaysia in September 1968 abrogated the
antismuggling pact and by November had introduced a bill to revoke the border
pass system. Smuggling has increased enormously since that date.
TRANSPORTATION
36. The only railroad on Borneo is in Sabah?a 96-mile, meter-gage line be-
tween Kota Kinabalu and Melalap. All of the principal towns along the west
coast are connected by roads ( see Figure 16). Except for the recently completed
road between Tawau and Semporna, however, no roads as yet connect the
major towns of eastern Sabah. Nor is there a road between the eastern and
western parts of the state. An 89-mile gravel road does extend from Sandakan
westward through the Labuk Valley as far as Telupid. In 1968 Australian
engineers began constructing a 45-mile extension across the rugged, heavily
forested mountains to connect with a road crossing the western coastal plain
from Kota Kinabalu to Ranau. Completion of the new stretch, scheduled for
1973, will accelerate the economic integration of west and east and will greatly
enhance the mobility of the labor force. All of a road linking the eastern ports
of Tawau and Lahad Datu, except a segment north of Kunak, has been com-
pleted (see Figure 17); plans call for a road to connect Lahad Datu with
Sandakan, thence to extend northwestward across the mountains to Langkon,
south of Marudu Bay.
37. Most cargo moves between the Sabah ports and between Sabah and ports
in the rest of Malaysia in small ships ( under 1,000 gross register tons) of the
Malaysian merchant marine. Cargo movement between Sabah and other Asian
countries utilizes foreign vessels, mostly flying the flags of Great Britain, Japan,
the Netherlands, Norway, and Panama.
38. Malaysia-Singapore Airlines ( MSA) has daily flights connecting the major
towns of Sabah with one another as well as with Brunei, the principal towns
of Sarawak, and Singapore. MSA and Cathay Pacific both have twice weekly
flights connecting Kota Kinabalu with Hong Kong. The Malaysian Government
is currently expanding air facilities in the state.
*Smuggling had actually declined before the antismuggling agreement was signed, largely
because a lowering of the tax on cigarettes in the Philippines had reduced the demand for the
Hong Kong products.
SECRET 17
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
18
FIGURE 16. All-weather road which extends along entire west coast. Roads in
the western part of the state are generally adequate for existing traffic.
FIGURE 17. 1960 view of road between Tawau and estate at
Quoin Hill. This road is being extended northward to connect
with Lahad Datu.
SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
APPENDIX
SOVEREIGNTY DISPUTE
HISTORY
Rival political powers have made conflicting claims to much of present-day
Sabah through the years.* In 1704 the powerful Sultan of Brunei, whose domain
included all of Borneo, ceded to the Sultan of Sulu the coastal territory between
the Kimanis River in the western part of present-day Sabah and the Sebuku River
in the northeastern part of present-day Kalimantan. The cession was made in
return for military aid in one of the many territorial squabbles of the day. No for-
mal deed or treaty is known to have existed, and subsequent Brunei sultans, deny-
ing that the cession took place, continued to claim the "ceded" territory. Although
the Sultan of Sulu never exercised sovereignty over any part of Borneo during the
ensuing years, he did not relinquish his claim and attempted at times to dispose
of the territory for financial gain.**
During the 18th and 19th centuries the north and east Borneo coasts actually
were under the control of independent principalities inhabited by pirates who
menaced shipping in the region. As the pirates grew bolder and richer, the powers
of the Brunei and Sulu Sultanates waned. In the middle of the 19th century,
although not occupying any of Borneo, the Sultan of Sulu still claimed ownership
of the coastal tract ceded to him in the early 18th century by the Sultan of Brunei.
In 1877 the Sultan of Brunei, contending ( as had his predecessors) that the
1704 cession to Sulu had never occurred, ceded his claim in perpetuity to a
partnership formed by Baron von Overbeck, an Austrian entrepreneur resident
in Hong Kong, and Alfred Dent of the British business house of Dent Brothers.
The following year, after learning of the unsubstantiated Sulu claim, Von Over-
beck acquired for the partnership a grant of essentially the same piece of land
from the Sultan of Sulu. On the west coast the Sulu grant extended only to the
Pandasan River, approximately 70 miles north of the Kimanis River, whereas
the Brunei grant extended to the Kimanis River. Both grants extended southward
*For a more detailed historical account of the current Philippine claim to Sabah, see
"Historical Notes on the North Borneo Dispute," by Leigh R. Wright, in the Journal of Asian
Studies, vol. XXV, No. 3, May 1966. For a discussion of the current political aspects of the
claim, see Sabotaging Sabah, by Willard A. Hanna, American Universities Field Staff South-
east Asia Series, vol. XVI, No. 15, Sep. 1968.
**In the Sulu-British treaties of 1763 and 1764, for example, the Sultan of Sulu purportedly
awarded his Borneo territory to the British East India Company.
SECRET 19
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
on the southeast coast to the Sebuku River ( see map). Because interior Borneo
was almost completely unexplored, neither grant designated interior boundaries.
Von Overbeck and Dent agreed to pay 5,000 Malay dollars a year to the Sultan
of Sulu. These payments were made regularly to the Sultan and, after 1936, to
his heirs. In 1962 the heirs transferred their Sabah claim to the Philippine
Government.
Six months after the 1878 grant by the Sultan of Sulu to Von Overbeck and
Dent, Spain?which had controlled most of the Philippine Islands since the
16th century?annexed the Sulu territories and tried to reestablish the Sultan's
claim to territory on Borneo. The attempt failed, however, and in 1885 Spain
agreed to renounce all claims to the Sultan's Borneo property in exchange for
Great Britain's recognition of Spanish soverignty over the Sulu Archipelago.
In 1881, Great Britain granted a royal charter to the Dent Brothers (who had
bought out Von Overbeck), thus establishing the British North Borneo (Char-
tered) Company. North Borneo became a British protectorate in 1888 and a crown
colony in 1946. It was made a state within the Federation of Malaysia in 1963
and has since been known as Sabah.
CURRENT STATUS AND PROSPECTS
The current dispute between Malaysia and the Philippines hinges upon the
translation of the Sulu document that ceded the Borneo territory to Von Over-
beck and Dent in 1878. The document was executed in the Malay. language
(written in arabic script) and apparently translated into English some time later.
The English version uses the terminology "grant and cede . . . forever and in
perpetuity." The Philippine Government claims thatthe word "cede" was wrongly
translated from the Malay and should have read "lease"; it further argues that
the annual payments made by the British North Borneo ( Chartered) Company?
and later by the British and Malaysian Governments?to the Sultan of Sulu
and his heirs imply a lease, not a sale. The British and Malaysians, on the other
hand, maintain that the document clearly states a transfer "in perpetuity" and
is therefore binding under international law. Both versions connote, however,
precise legal meanings to terms that were used only vaguely.
The 82 years of virtually unchallenged British administration of the territory
would appear to diminish the legitimacy of the Philippine claim, voiced inter-
mittently since the Philippines gained independence in 1946 but pressed only
since 1963. The United States, during its colonial rule of the Philippines ( 1898-
1946), .recognized British sovereignty in North Borneo. A US-Great Britain
convention of 1930 defined the boundary between Philippine and North Borneo
territory, and a 1932 exchange of notes between the two countries acknowledged
that North Borneo was under British protection.
Even if the current hassle is resolved in favor of the Philippines, the question
of boundary alinement will remain. The Sulu cession to Von Overbeck and
Dent in 1878 is described vaguely and would be practically impossible to
20 SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
demarcate on the ground. The section of the 1878 document that describes the
territorial extent reads as follows:
. . . commencing from the Pandasan River on the northwest coast, and extending
along the whole east coast as far as the Sibuku [Sebuku] River in the south, and
comprising, amongst others, the states* of Paitan, Sugut, Bangaya, Labuk, Sandalcan,
Kinabatangan, Mumiang, and all the other territories and states to the southward
thereof bordering on Darvel Bay, and as far as the Sibuku River, with all the islands
within three marine leagues of the coast.
Pressing for resolution of the claim described above would inevitably bring the
Philippines into conflict with Indonesia, as the claim includes a plot of land of
indeterminate extent south of the Malaysia-Indonesia boundary. The latter
boundary was defined in an 1891 convention between Great Britain and the
Netherlands, which controlled the Dutch East Indies until 1949.
*Apparently independent coastal or riverine principalities.
SECRET 21
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
115 116
MALAYSIA
SABAH
Tawau
State boundary
Residency or division boundary
State capital
Residency or division capital
Meter-gage railroad
Road
Road under construction
Spot elevations in feet
--
0 25 50 75
Statute Miles
25 50 75
Kilometers
SOUT
H CHINA
PULAU
MENGALUM
SEA
Kampon
Suruso
Tu
Pan
BALABAC
PULAU
BALAM BAN
BALABAC
ISLAND
STRAIT
118 119
PHILI
Suang Pal
PULAU
MALAWALI
Sikuatl
Tigama
Dund
Kudat t
MARUDU
BAY
ngkubau
Taburan
PPINES
AN
SOUTH
CHINA
c;)
SINGAPORE
SEA
INDIAN
OCEA N
Palawan
9.
Borneo
ONE
JAVA SEA
j14;lanao
CELEBES 0
SE A
pg
CAGAYAN ER
SULU ISLAND
PULAU
JAM BONGAN
SULU
SEA
? 8?
rusan
ota Belud,,
L
GA YA
PULAU BAY
GAYA
LAB UK
BAY
6
Penamp
ANDAKAN
PULAU Pap
TIGA CZ)
K
Kampong IMA NIS
Kiar Kimanis
BAY
Membakut
PULAU
LAB UAN
Tambun
Beaufort
Victoria
BRUNEI
BAY
Sindu
Tuton
DARVEL BAY
PULAU
TIMBUN MATA
Kuala
Belait
RU E
itish pro
?
Kampo
Kampong Apas
75116 2-69
6
117
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
EBES
EA
118 119
SIBUTU
GROUP
37
5
4
gsfeitteil For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
SECRET
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7
Pb
(,6(- 34)/
Approved For Release 2000/05/31 : CIA-RDP84-00825R000100620001-7