Frustration over Labuan’s future continues to mount

KOTA KINABALU: Labuan’s future hinges on its alignment with mainland Sabah’s development plans, says Labuan Chamber of Commerce (LCC) chairman Daniel Doughty.

“It’s crucial for Labuan to synergise with Sabah, leveraging our collective strengths to drive forward our economic ambitions. Together, we could economically grow stronger.

“How can Labuan, with its 80 government agencies serving a population of less than 100,000 and a divided administrative structure between state and federal reporting, including the Labuan Port Authority’s alignment with Bintulu, expect different outcomes in its regional economic role over the next 40 years if it continues under the same federal territory administration without significant strategic or administrative reforms?” Doughty said.

He was addressing an ongoing discourse surrounding Labuan’s status.

Last month, Tuaran MP Wilfred Madius Tangau of Upko suggested in the Dewan Rakyat that the Federal Government return Labuan to Sabah, claiming Putrajaya had not developed the tax-free island as promised.

Former Sabah chief minister Datuk Seri Yong Teck Lee had also proposed a committee be set up to reclaim Labuan from the Federal Government.

Subsequently, Labuan Umno said Sabah political leaders should stop the debate on this matter.

However, Doughty highlighted frustration over the launch of the Tun Razak Exchange (TRX) in Kuala Lumpur as an international financial centre, describing the move as competing with Labuan, which is known to operate in a similar role.

“Despite Labuan’s status as a federal territory for over four decades, it continues to grapple with issues related to inconsistent administrative policies, connectivity, and the provision of basic utilities like power and water,” he said.

He said Labuan’s strategic importance is at risk of being overlooked since it is thousands of miles away from the central government in Putrajaya.

“This oversight raises concerns about its future role and positioning within the Malaysia and Borneo region economic landscape,” he said.

Doughty said it is time to review the governance model of Labuan as the changing geopolitical landscape, and increasing autonomy and recognition for Sabah and Sarawak further supports the need for this reassessment.

Should the discourse surrounding the call for Labuan’s return to Sabah remain limited to mere political rhetoric, Doughty suggested that there be alternative governance models.

For example, he said the island could benefit from being part of a special economic zone.

The LCC also urged all stakeholders, including the federal and Sabah governments, to engage in a constructive dialogue focused on Labuan’s long-term economic relevance and prosperity within the region.

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