Canberra, 3 September 1965
Secret
Political Situation in the Borneo States
10. The lull in Sabah’s political affairs continues while ideas crystallise. The bad impression created by the Tunku’s visit has persisted1 and has given rise to a feeling that to remain in the Federation would be to accept a sort of colonial status vis a vis Kuala Lumpur. Donald Stephens has told Lord Head that he would base his policy on the report of the Alliance2 committee which is still considering Sabah’s constitutional position within the Federation. He was confident of winning the election due in March on a platform calling for looser ties with Kuala Lumpur. It seems unlikely that he will be able to achieve his objectives without splitting the Alliance party. Tun Mustapha returned on 27 August, but neither he nor any other responsible Muslim leader is yet in command of the situation. Stephens fears that the Muslims will incite the Kadazans, whose main feeling at the moment is one of satisfaction that their leader is back at the helm.3 Some of the Chinese, although disorganised and non-committal as yet, would be likely to support Stephens if rallied or antagonised.
11. In Sarawak, there is disenchantment on the part of the Ibans with Ningkan, the Chief Minister, and Temenggong Jugah, Federal Minister for Sarawak Affairs, on the grounds that they are stooges of Kuala Lumpur. The Chinese would probably now support the Ibans in this view. Ningkan himself seems content at the moment to let Sabah make the running. The strength of the opposition demands for a referendum4 seems to be growing with moderates joining the extremists in supporting resolutions in local councils.
12. Meanwhile, the Tunku’s attitude to the Borneo States continues to be disquieting. He is treating the situation as a minor domestic issue which can be solved by locking up a few tiresome people if they go too far. Even moderate pressure for a revised status for the Borneo States within the federation is likely to be treated as treason, and the Tunku has told Lord Head that he has decided to postpone the Sabah election and would forbid any referendum. It seems likely that such a repressive line can only serve to aggravate the situation and confirm fears that Kuala Lumpur intends to keep Sabah and Sarawak in their places by tyrannical and colonialist means. If the Tunku persists in this attitude, we cannot exclude the possibility of gradual deterioration in the internal situation in the two territories.
[NAA: A1838, 3028/2/1 part 3]
1 See footnote 2, Document 320.
2 That is, the Sabah Alliance (see footnote 3, Document 97).
3 See paragraph 4, Document 322 and paragraph 6, Document 328.
4 That is, a referendum as to whether the states remained within the federation.