WILL SABAH DEFECT?

C O N F I D E N T I A L KUALA LUMPUR 000536

SIPDIS

FOR EAP/MTS AND INR

E.O. 12958: DECL: 06/24/2028
TAGS: PGOV PINR KDEM MY
SUBJECT: WILL SABAH DEFECT?

Classified By: Political Section Chief Mark D. Clark, reason 1.4 (b and
d).

Summary
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1. (C) Sabah politicians of all walks criticized Prime
Minister Abdullah's leadership and the National Front (BN)
government's marginalization of Sabah during polchief's
meetings in the east Malaysia state, June 18-20, which took
place as a small Sabah BN party, SAPP, announced its two MPs
would support a no-confidence vote against the PM. Many
politicians believed SAPP may have jumped the gun, but they
also saw SAPP's public opposition to Abdullah as highly
popular with voters and feared BN would be soundly defeated
if an election were held soon. While an additional 6 to 12
BN MPs reportedly are considering breaking ranks, they appear
to have adopted a wait-and-see attitude for now. Seeing a
"window of opportunity," Sabah politicians seek political
leverage and personal gain out of BN's sense of crisis, and
from Sabah's critical role in maintaining BN's parliamentary
majority. Opposition to Abdullah's continuation as Prime
Minister, however, does not necessarily translate into
support for opposition leader Anwar Ibrahim, and UMNO leaders
who want Abdullah to step down could also take advantage of
Sabah's discontent. End Summary.

Sabah Leaders Identify Common Concerns
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2. (C) Polchief and FSN political specialist visited Sabah
June 18-20 and held nine separate meetings with senior
politicians from both the ruling National Front (BN)
coalition (the United Malays National Organization, UMNO; the
United Sabah Party, PBS; the United Pasok Momongan Kadazan
Party, UPKO; the Sabah Progressive Party, SAPP),and the
opposition (the Democratic Action Party, DAP; the Peoples
Justice Party, PKR). The Sabah politicians, even those of
UMNO, were united in their complaints of Sabah's persistent
marginalization by national BN and UMNO leaders. They also
identified the same set of significant problems facing the
state: massive illegal immigration from the Philippines and
Indonesia (including migrants illegally granted national ID
cards to swing past votes in favor of UMNO); inadequate
royalty from Sabah's rich oil and gas production; the high
cost economy compared to Peninsular Malaysia; and economic
restrictions imposed by the federal government such as on
shipping. Non-Muslim politicians also voiced strong concerns
over increasing Muslim Malay influence.

No Support for Abdullah
--------------


3. (C) We found no expressions of support for the leadership
of Prime Minister Abdullah in any of our meetings. All
politicians resented Sabah's under-representation in
Abdullah's cabinet, particularly in light of East Malaysia's
contribution of over one-third of BN parliamentary seats. To
various degrees, BN politicians, including the two Deputy
Chief Ministers we met, joined their opposition counterparts
in criticizing the Prime Minister for ineffective leadership
and for not addressing Sabah's concerns. Deputy Chief
Minister and PBS President Joseph Pairin Kitingan said he
hoped that PM Abdullah would resign soon so that BN could
regroup under a stronger leader. Deputy Chief Minister and
PBS Vice President Yee Moh Chai described the Prime Minister
as weak and unable to carry out decisions. UMNO warlord and
former Chief Minister Salleh Said Keruak said Abdullah's
"stubborn" insistence in remaining Prime Minister was
"destroying UMNO." UPKO Secretary General Wilfred Tangau was
highly critical of Abdullah as weak, out of touch, and unable
to fulfill recent promises made to Sabah. On June 18, BN
component party SAPP publicly declared its support for a
no-confidence motion against Abdullah (see below).

Snap Election Would Mean BN Defeat
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4. (C) BN politicians from UMNO, PBS, and UPKO all estimated
their parties would lose badly if a snap election were held
soon. Public sentiment stood firmly against the BN,
particularly in the wake of the fuel price increases.
Opposition parties failed miserably in the March election
(taking only 1 out of 25 parliament seats) in large part
because Sabahans did not believe the Opposition had any
chance of winning; the March 8 result demonstrated otherwise
and many more people would now vote against BN.
SAPP Stands Alone for Now
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5. (C) SAPP President and former Chief Minister Yong Teck
Lee, who drew national attention with his June 18 declaration
that SAPP's two MPs would introduce or support a
no-confidence motion against PM Abdullah, said his party had
made this controversial decision because the Prime Minister
is incompetent, cannot follow through on his promises, and
cannot address Sabah's priorities. (Comment: Some other
politicians said Yong, as leader of a very small party and
holding no office himself, had little to lose in the gamble
and took the stance in a bid to regain political relevance.
End Comment.) Yong predicted a near-term no-confidence
motion would not succeed, but still had symbolic value. BN
likely would kick out SAPP, but SAPP had no plans to join the
opposition alliance and would wait for the next election to
reenter government. Yong did not expect other BN parties to
immediately follow SAPP's lead. UMNO politicians stood to
gain too much money from the party election process that runs
through December,
and other BN parties were not ready to break ranks.

Did Anwar Orchestrate SAPP's Move?
--------------


6. (C) Yong denied that SAPP's breaking of ranks with
Abdullah had been orchestrated by Anwar Ibrahim, and stated
the party's decision was not linked to an opposition
strategy. Sabah PKR chief Jeffrey Kitingan, however, claimed
that Yong had discussed SAPP's position in advance with Anwar
and the move was coordinated with other disaffected Sabah MPs
who would follow in due course (see below). Separately, PKR
state liaison officer Ansari Abdullah commented that SAPP had
"moved too fast." Ideally, the opposition wanted one or
several MPs from Sarawak and the Peninsular Malaysia to break
with BN soon, but Ansari explained that Anwar Ibrahim
personally was carrying out negotiations with would-be
defectors and only Anwar knew the details. In contrast to
PKR's views, the opposition DAP's state chief Hiew King Cheu
argued that SAPP's decision did not represent a coherent
opposition strategy and instead reflected Yong's personal
hubris.

SAPP Move Popular, Others May Follow
--------------


7. (C) By and large, BN state party leaders believed that
SAPP's move was highly popular within Sabah. UPKO's Wilfred
Tangau said Yong had made himself into a "hero." UPKO had
debated whether to endorse the same position, and decided
that individual MPs would be allowed to vote their conscience
should it come to a no-confidence vote against PM Abdullah.
UMNO's Salleh Said Keruak commented that Yong had acted "too
soon," and SAPP's action could force others to speed up their
decision making or risk losing popular support.
Matter-of-factly, Salleh stated that between 8 and 14 BN MPs
(out of Sabah's 25 seats) would leave BN, naming 5 from UMNO
and 4 from UPKO, in addition to 2 from SAPP. PBS appeared
less likely to break with BN at this juncture, multiple
sources concluded. PBS president Pairin Kitingan stated his
party would stick it out within BN for the time being despite
his grudging recognition that many Sabahans would applaud
SAPP's stand.

But Will They Join with Anwar?
--------------


8. (C) While freely criticizing PM Abdullah and discussing
possible defections from BN, Sabah politicians offered no
common view on whether opposition to Abdullah's continuation
as Prime Minister would translate into support for Anwar
Ibrahim and the opposition alliance's hopes to bring down the
BN government, or endorsement of another UMNO leader as Prime
Minister. The politicians we interviewed were split on views
of Anwar Ibrahim. SAPP leader Yong believed Anwar was
popular in Sabah, particularly among Malays, but he
emphasized SAPP did not plan to join the opposition alliance
Pakatan. UMNO warlord Salleh concurred on Anwar's
popularity, citing Anwar's public promise to increase Sabah's
oil and gas royalties to 20 percent, and his private pledge
of political autonomy for the state. While DAP and PKR in
theory are partners in the opposition alliance, DAP state
leader Hiew spoke scornfully of Anwar Ibrahim, asking
rhetorically, "why should anyone sacrifice for Anwar's
ambitions?" PBS' Pairin Kitingan voiced his distrust of
Anwar who "is only interested in becoming Prime Minister."

9. (C) Some Sabah politicians discussed forming a third
block, separate from both BN and Pakatan. DAP party members
spoke positively of joining UMNO veteran Tengku Razaleigh in
forming a third parliamentary block led by Razaleigh and
incorporating disaffected MPs from UMNO, East Malaysia, and
PKR, along with DAP. Other politicians, including PBS leader
Pairin, simply appeared to endorse DPM Najib taking over
immediately from Abdullah.

Comment - Window of Opportunity
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10. (C) Sabah's fractured and highly opportunistic political
scene, and the perception of Abdullah as a waning and
ineffective leader, make Sabah a fertile field for the Prime
Minister's opponents. We heard repeatedly that Malaysia's
current political situation, with a suddenly emergent
opposition and East Malaysia's MPs representing the margin
needed to maintain BN in power, represented a "window of
opportunity" for Sabah. Sabah's BN politicians are actively
considering ways to leverage their new importance in the
parliamentary balance -- whether to better address Sabah's
unique concerns, or to personally profit from the situation
by selling their support, or both.


11. (C) It appeared from our visit that SAPP's announcement
of no-confidence in PM Abdullah at least had been encouraged
by Anwar Ibrahim, but was not part of a definitive opposition
plan signaling the imminent defection of a significant number
of MPs. SAPP may have jumped the gun, and also may be
hedging its bets by not joining Pakatan. While we heard that
roughly half of Sabah's 24 BN MPs could break ranks, with
defections most likely from UPKO and UMNO, these politicians
seem to have adopted a wait-and-see approach for now. Moving
into opposition to PM Abdullah, however, does not necessarily
translate into support for Anwar Ibrahim. UMNO leaders
seeking to block Abdullah from seeking reelection in the
December party elections could also gain advantage in Sabah.
Sabah's political elites will want to choose their options
carefully to emerge on the winning side.
KEITH