25 years later, Labuan a white elephant Joe Fernandez | May 2, 09 1:14pm
Former chief minister Harris Salleh has finally convinced himself, like most of his fellow Sabahans, that Labuan Island has become a white elephant. MCPX map of labuan islandThe duty-free island became a Federal Territory on April 16, 1984, and 25 years later still remains an international offshore financial centre and tax haven in name only. These days, the island is more in the news as a hotbed of human trafficking activity in Filipinas and locals feeding the fleshpots and labour markets in Singapore and the region. “Labuan is Malaysia’s one and only offshore financial centre or international business and financial centre but it is not a success,” said Harris without mincing his words during the ongoing 25th Silver Jubilee celebrations of Labuan as a Federal Territory. “Also, industries which are suitable for Labuan were established in Peninsular Malaysia and not on the island as promised.” The former chief minister noted that many concrete structures had emerged on the island in the last quarter century but have since degenerated into becoming white elephants sitting in the tropical sun. labuan portHe cites the little-visited Bird Park and Pulau Papan Picnic Resort as among the projects which generate little economic activity for the island and “Labuan continues to remain a village town”. The island is said to be an ideal place to be the headquarters for the Malaysian Armed Forces in Sabah and Sarawak. Instead, even the small military contingent that was on the island moved away some years ago to the mainland. The main reason cited is the desire of the top military brass to rub shoulders with the state government leaders in Kota Kinabalu “for their own ends”. Harris had high expectations when he handed over Labuan to the federal government nearly a quarter century ago. Labuan is not economically viable His main expectation was the federal government, with all its massive manpower and financial resources, would turn the island into a “Little Singapore”. This, the federal government had failed to do even on a small scale, added Harris. “It is abundantly clear after 25 years that Labuan is not economically viable and the federal government has failed to develop the island in all aspects. There are no economic activities to sustain and assure the present and the future.” harris mohd sallehHarris noted that successive prime ministers in Kuala Lumpur had raised the prospect of turning Labuan into a haven for retired foreigners and senior citizens. However, the policy on retired overseas people’s settlements has seen no improvement since it was first mooted and “there is not even one organised self-contained housing complex on the island built for retired people”. A pilot project on the island for retired foreigners was mentioned by former prime minister Dr Mahathir Mohamad. Nothing was heard thereafter and Mahathir turned his attention towards Langkawi island in his home state of Kedah. “The federal government must have a straightforward policy. There are many reasons that foreigners must consider before moving to Labuan or Malaysia,” said Harris, who has studied the matter in some detail in recent years. “Foreigners must have the assurance that they can stay in Malaysia all their lives. The present policy only allows them to stay 10 years. There is no guarantee that they will be able to stay in the country after the 10th year.” Retirees generally can be expected to sell off their homes before moving to Malaysia and can ill-afford to take the risk of the 10-year policy which might see them being shipped back eventually to their home countries, “wiser but older, poorer and sicker”. Policies and programmes not consistent Malaysia can be a second home for foreigners, feels Harris, if the federal government is serious about the concept and changes its present policies. He notes that most of the people who may be attracted by the second home concept would be professionals and experts in various fields “who can still contribute their knowledge to the country and guide the people”. Apparently, there are many other reasons for the failure of the federal government to achieve the objectives it set for itself upon taking over the island, according to Harris. He reckons that policies and programmes adopted for the island were wrong and done “half-and-half” and “perhaps the biggest issue is that they are not clear and keep changing all the time”. Above all, the federal government allegedly does not listen to the views of local leaders and civil servants and is not willing to entertain local requests. Harris’ modest but dwindling band of aging admirers claim that the federal government has so far been unable to dwarf what their man himself has done for the island. During Harris’ time, it is said that Labuan rapidly emerged from the economic backwaters with the completion of the Rancha Rancha Industrial Estate, the Asian Supply Base for the oil and gas industries, a methanol plant, and a shipyard, among others. Even so, no one remembered Harris’ good deeds come election day in 1985. Harris, a native Labuanite of Hindu Indian and Muslim Brunei parentage, paid the ultimate price himself for handing over the island to the federal government when he was booted out of office by the 45-day old PBS (Parti Bersatu Sabah) led by the then unknown Joseph Pairin Kitingan from Tambunan. Not even a single sen in compensation Labuan wasn’t the only reason for Harris’ untimely exit but it was the proverbial last straw that broke the camel’s back. Sabahans felt that Harris had no right to hand over the island to Kuala Lumpur and to add insult to injury; Kota Kinabalu didn’t get even a single sen in compensation unlike in the case of the other federal territories where billions had been paid. Former prime minister Abdullah Ahmad Badawi, taking a cue from the proposed halal hub in Tanjung Manis, Bintulu, Sarawak, promised to turn Labuan into an international halal hub before being forced out of office last month. Labuanites are convinced that there will be no halal hub on their island. The main federal government presence on Labuan is through 50 government departments, each with a director, which reports to Putrajaya and Kuala Lumpur. This has seen the federal government spending some RM8 billion over the last 25 years on the island. Much of this money has not been seen by the people, it is alleged, but has gone into the pockets of “a favoured few mostly from elsewhere”. These “favoured few” have secured projects to improve the infrastructure including water and electricity facilities, landscaping works, and establishing institutions like the Labuan campus of the Universiti Malaysia Sabah, the Labuan International Matriculation College and a relatively-modest financial centre. Other projects secured by the “favoured few” include the hospital, a new airport where the tiling work by a Sarawakian company has been so badly done it is falling apart, the Sea Sports Complex which is hardly used, court houses, a second undersea pipeline for fresh water from the mainland and the international ferry terminal completed recently. Air Asia also giving up on Labuan Labuan is just used as a post box address with a token staff presence to benefit from the island’s international offshore financial centre and tax haven status, according to critics in the know. “Much of the actual international financial work is done in Kuala Lumpur.” Already, even incurable optimist AirAsia is giving up on Labuan, having stopped its Labuan-Kota Kinabalu flights after two attempts. Meanwhile, its Kuala Lumpur-Labuan flight has been cut to one a day after its entry into Brunei. This has seen many of the people in the sultanate avoiding the island unlike before when it was a stopover en route to Kuala Lumpur. Many critics see the verdict of history as being against the emergence of Labuan from the backwaters to international prominence. Brunei, for example, eventually found the island of little use and handed it over to Queen Victoria of the United Kingdom and Northern Ireland in 1846. The British failed to turn it into a naval and re-fuelling station for the South China Sea as initially planned and after mining the local coal reserves for several decades, handed it over to the Chartered Company of North Borneo in 1881. In 1906, it came under the Straits Settlements linking Singapore, Malacca and Penang which was briefly ruled from India. City status for Labuan in 2015? In 1941, Labuan was under Japanese rule for a time and after World War II, when the Chartered Company sold Sabah to the Colonial Office in London for 1.2 million pounds, the British put the island and Sabah together as British North Borneo. The short period of British colonial rule ended with the independence of Sabah and Labuan on Aug 31, 1963 followed by the newly-independent country forming the Federation on Malaysia on Sept 16 1963 together with neighbouring Sarawak, Singapore and Malaya despite Brunei’s pullout at the 11th hour over the sharing of oil and gas revenues. Labuanites are looking forward to 2015 when it is hoped that the island’s urban centre would achieve city status. Another local concern is the building of a bridge to Menumbuk on the mainland to bring in the numbers to generate the critical mass which will help make the island more economically viable. Among the still hopeful, Harris being among them, Labuan could still be part of the golden heart of North Borneo which embraces the Menumbuk to Kota Kinabalu’s coastal stretch, Bandar Seri Begawan in Brunei, Limbang and Miri in northern Sarawak. Meanwhile, Sabahans have not given up on Labuan. They hope to win back the island once there is a federal government in Kuala Lumpur with a two-thirds majority in Parliament to amend the Constitution and reverse the takeover. However, they are not banking their hopes too much on the ruling Umno-led BN ever returning the island to the state.