Malaysia Firms Up a Bit of Territory

Brunei's effective abandonment of its claim to Limbang, the sliver of Sarawak which cuts its own territory in two, appears to close one of Southeast Asia's long running minor border disputes.

Following a meeting between the Sultan of Brunei and Malaysian Prime Minister Abdullah Badawi the two countries exchanged letters which do not actually mention Limbang specifically but provide for the precise delineation of their boundaries on a basis that amounts to Brunei's acceptance of the status quo.

There isn't much to Limbang. The town, 30 minutes away from the Bruneian capital Bandar Sri Begawan by speedboat, is mainly a convenient place for dry Brunei's thirsty expatriates and the Chinese population to seek refuge to buy liquor and other banned items. Smuggling of items like pork and non-halal chicken forbidden under Brunei's strict Islamic dietary rules is also prevalent. The area's 7,800 square kilometers, most of them mangrove swamps and mud flats, were also projected as a site on which the Malaysian government had plans to seek to achieve rice self-sufficiency by planting it into paddies before the collapse of rice prices.

But at least as important is the settlement of a sea boundary delineation dispute which has held up oil and gas exploration off the two countries' mutual coasts. That would not only allow exploration in a very promising area but enable Malaysia and Brunei to form a united front against China's hegemonistic claims over the South China Sea. Exploration has been held up since 2003 when Brunei and Malaysia issued competing licenses over two blocks in the disputed area, Malaysia to Murphy Oil of the US, Brunei to consortia led by Shell and Total.

Both countries needed to stop quarrelling because Malaysia is set to become an oil importer within a few years if it does not find more reserves, and Brunei's fields, which have for decades made it the richest nation on a per capita basis in Southeast Asia, are fast depleting. According to a 2006 study by Rabobank, the Dutch financial services provider, Brunei's wells will run dry in 2015—just a bit over six years from now. A 2003 study by the World Markets Research Centre puts the end of the gravy train a year earlier, 2014. Natural gas, the other leg of Brunei's economy, is expected to run out 10 years later, in 2025.

Significantly too, shortly before his Brunei trip Badawi made an inspection tour of Malaysian facilities on Layang-Layang, an atoll of the Sabah coast which is one of the Spratly group of islands also claimed by China. The Chinese Foreign Ministry responded by reasserting its claim to Layang-Layang, which is roughly 300km from the Sabah coast and 1,800km from the southern tip of China's most southerly inhabited island, Hainan.

The Malaysian atoll is in fact the only one of the disputed Spratlys to be permanently occupied by non-military personnel, boasting an airstrip and 90-room resort hotel for visitors to its superb dive sites.

The Limbang settlement is also a reminder of a curious incident back in 1987 when Malaysia was in economic difficulties and then Prime Minister Mahathir Mohamad barely survived a challenge to his leadership by Tengku Razaleigh Hamzah. The Far Eastern Economic Review on May 21 that year published a short item saying that on a visit to Brunei by Mahathir there had been discussion of a “possible sale of Limbang” to Brunei.

Such a deal might have made sense. Malaysia was hard up for cash, Brunei had billions of excess reserves from its oil exports. Limbang had a tiny population – then about 30,000, had scant economic value and its road links were with Brunei, not the rest of Sarawak. It was an anomaly over which Brunei did have some historical claim as it had been forcibly seized by Sarawak's White Raja Brooke in 1890 and deemed the Fifth Division of Sarawak. But its sale, however logical, could easily have been used by Mahathir's UMNO enemies.

The Review's sources were high level diplomats but as they were unwilling to be quoted and no other confirmation was available the magazine had to retract its story, whereupon it was sued for libel by Mahathir.

The world and history have moved on. Malaysia is much stronger than in 1987, Brunei more vulnerable. So instead of the question of whether Limbang should be part of Brunei not Sarawak the next issue, maybe two decades hence, may be whether Brunei becomes part of Sarawak.