# Sabah: The Land Below the Wind and Its Terms of Federation

> Malaysia's second-largest state sits on the northern tip of Borneo, crowned by Mount Kinabalu and anchored by Kota Kinabalu. Sabah entered the federation as North Borneo under the Malaysia Agreement 1963, and the safeguards attached to that entry — immigration control, special financial arrangements, and a constitutional veto over certain amendments — remain the frame for its relationship with the federal government.

- Category: states
- Language: en
- Status: published
- Updated: 2026-07-24
- Canonical: https://negaraku.md/en/states/sabah

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Sabah did not join Malaysia as a state joining a country. It joined as one of the
signatory territories that created the country — North Borneo signed the Malaysia
Agreement in London in July 1963 alongside the Federation of Malaya, Sarawak,
Singapore and the United Kingdom. That starting point still shapes how Sabah is
governed, funded and talked about today, and it is why a profile of Sabah has to
cover a treaty as well as a mountain.

## Key facts

| | |
| --- | --- |
| Capital | Kota Kinabalu |
| Population | 3,418,785 (2020 census, DOSM) |
| Head of state | Yang di-Pertua Negeri (Governor); state government led by a Chief Minister |
| Highest point | Mount Kinabalu, 4,095 m — the highest mountain between the Himalayas and New Guinea |
| Key industries | Agriculture (palm oil), oil and gas, services, tourism |
| Entered the federation | As North Borneo, under the [Malaysia Agreement 1963](/en/malaysia/ma63) |

## Geography

Sabah occupies the northern tip of Borneo, the world's third-largest island. It is
Malaysia's second-largest state after [Sarawak](/en/states/sarawak), which borders it
to the southwest, and it shares a land border with Indonesian Kalimantan to the
south. Two seas frame it: the South China Sea on the west coast and the Sulu and
Celebes Seas on the east.

The state's traditional nickname, "Land Below the Wind", refers to its position
south of the typhoon belt. Its dominant landmark is Mount Kinabalu, a 4,095-metre
granite massif that is the highest mountain between the Himalayas and New Guinea.

The mountain sits inside Kinabalu Park, a 75,370-hectare protected area managed by
Sabah Parks. In 2000 it became Malaysia's first UNESCO World Heritage Site,
inscribed for an exceptional concentration of plant life — the park's habitats run
from lowland rainforest at about 150 m to sub-alpine scrub at the summit zone, and
it is recognised as a globally important centre of plant endemism.

Offshore, the island of Labuan on Sabah's west coast is today a separate Federal
Territory — see [Labuan](/en/states/labuan) for how that came about.

## Economy

Sabah's economy rests on commodities and, increasingly, on services and tourism.

- **Agriculture** — Sabah is one of Malaysia's principal oil palm producing states,
  and the crop dominates its agricultural output.
- **Oil and gas** — petroleum is produced off Sabah's coasts, and petroleum revenue
  arrangements are one of the standing items in federal–state discussions under
  MA63 (described below).
- **Services and tourism** — Kota Kinabalu is the gateway for a visitor economy
  built on Mount Kinabalu, island and dive sites, and wildlife.

By the state government's own account, Sabah contributed 5.5 per cent of Malaysia's
GDP in 2023 — the sixth-largest share among the states, in a group with Selangor,
Kuala Lumpur, Johor, Sarawak and Penang that together produced 73 per cent of the
national economy. The state recorded RM7 billion in state revenue in 2023, a record
for Sabah, and attracted RM11.34 billion in approved investments that year, the
seventh-highest in the country.

Set against that scale is a long-standing development gap: Sabah's income levels and
infrastructure coverage trail the more industrialised peninsular states, and closing
that gap is a stated priority of both federal and state development plans.

## Government

Sabah's head of state is the Yang di-Pertua Negeri, appointed by the
[Yang di-Pertuan Agong](/en/government/yang-di-pertuan-agong). The state government
is led by a Chief Minister who commands the confidence of the Sabah State
Legislative Assembly — unlike Sarawak, which retitled its head of government
Premier, Sabah retains the title Chief Minister.

Because Sabah entered the federation on negotiated terms, its state institutions
carry powers that peninsular states do not have, most visibly over immigration:
travellers arriving from Peninsular Malaysia or Sarawak clear a separate Sabah
immigration check, a control preserved as part of the state's entry safeguards.

## Sabah under the Malaysia Agreement 1963

This section describes the legal position and the positions taken around it,
without endorsing any side.

**The instrument.** The Malaysia Agreement was signed in London on 9 July 1963 by
the United Kingdom, the Federation of Malaya, North Borneo, Sarawak and Singapore,
and Malaysia came into being on 16 September 1963 — the story of that process is
told in [Formation of Malaysia](/en/malaysia/formation-of-malaysia-1963). The
agreement itself is short; the substantive safeguards for Sabah were carried into
the Federal Constitution by the Malaysia Act 1963.

**Where the safeguards sit.** The constitutional provisions most often cited for
Sabah include Articles 95B to 95E (legislative and administrative arrangements),
112C and 112D (special grants and assigned revenues, with provision for periodic
review), 161 and 161A (language and the special position of natives), and 161E —
which requires the concurrence of the Yang di-Pertua Negeri of Sabah before certain
constitutional amendments affecting the state can be made.

**The Twenty Points.** North Borneo submitted a twenty-point memorandum to the
Inter-Governmental Committee that prepared the constitutional arrangements. The
memorandum is frequently invoked in public debate as "Sabah's rights"; as a matter
of documentary record it was a submission to that committee rather than an annex to
the agreement, and which of its points were carried into binding form — and how —
is one of the questions on which the federal and state sides, and commentators,
read the record differently.

**The current process.** Parliament amended Article 1(2) of the Federal
Constitution in 2022 (Act A1642), revisiting the wording that describes Sabah's and
Sarawak's place in the federation. Implementation of MA63 matters — including
financial reviews and administrative devolution — is negotiated through a dedicated
Sabah and Sarawak Affairs machinery in the Prime Minister's Department, serving a
council chaired by the Prime Minister. Positions differ across participants on the
pace and scope of implementation; this article records that the process is ongoing
and does not characterise any party's stance.

For the agreement itself — what it says, what it points to, and what is argued
around it — see the dedicated article on [MA63](/en/malaysia/ma63).

## Common mix-ups

- **"Sabah joined Malaysia" vs "helped form Malaysia".** Official Malaysian accounts
  describe North Borneo, Sarawak and Singapore as parties to the agreement that
  created Malaysia in 1963, not as accessions to an existing federation. The
  distinction matters in constitutional debate and is worth stating precisely.
- **The Twenty Points are not the text of MA63.** They were a memorandum to the
  Inter-Governmental Committee; the agreement's undertakings run through that
  committee's report and the constitutional provisions listed above.
- **Chief Minister, not Premier.** Sarawak's head of government is now styled
  Premier; Sabah's remains Chief Minister.
- **Kinabalu Park is the World Heritage Site, not the mountain alone.** The
  inscription covers the 75,370-hectare park, of which the summit is one part.

## What's next

Explore [MA63](/en/malaysia/ma63) for a document-by-document account of the
agreement and its safeguards, [Formation of Malaysia](/en/malaysia/formation-of-malaysia-1963)
for the history of 16 September 1963, and [Sarawak](/en/states/sarawak) for how
Malaysia's other Borneo state carries a parallel — but not identical — set of
arrangements. For the federal side of the relationship, start with the
[Yang di-Pertuan Agong](/en/government/yang-di-pertuan-agong), who appoints Sabah's
Yang di-Pertua Negeri.

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*This article is classified as sensitive (3R+1: constitutional matters) under
NegaraKu.md's editorial policy, because Sabah's position under the Malaysia
Agreement 1963 and the federal–state implementation process are live constitutional
issues. It is written to be strictly descriptive and is held in draft pending human
sign-off before publication.*

## Sources

- Kawasanku — Sabah — https://open.dosm.gov.my/dashboard/kawasanku/Sabah (Department of Statistics Malaysia)
- Sabah among top six contributors to Malaysia's 2023 GDP — https://cm.sabah.gov.my/siaran-media/2311 (Jabatan Ketua Menteri Sabah)
- Kinabalu Park as World Heritage Site — https://whs.sabahparks.org.my/kinabalu-park-as-world-heritage-site (Sabah Parks)
- Kinabalu Park — World Heritage List — https://whc.unesco.org/en/list/1012/ (UNESCO World Heritage Centre)
- Federal Constitution (Reprint as at 15 October 2020) — https://lom.agc.gov.my/ilims/upload/portal/akta/LOM/EN/Federal%20Constitution%20(Reprint%202020).pdf (Attorney General's Chambers of Malaysia)
- Perjanjian MA63 — https://bhess.jpm.gov.my/index.php/perjanjian-ma63/ (Bahagian Hal Ehwal Sabah dan Sarawak, Jabatan Perdana Menteri)
- Agreement relating to Malaysia, United Nations Treaty Series Volume 750, No. 10760 — https://treaties.un.org/doc/publication/unts/volume%20750/volume-750-i-10760-english.pdf (United Nations)
- Constitution (Amendment) Act 2022 [Act A1642] — https://lom.agc.gov.my/act-detail.php?act=A1642&lang=BI (Attorney General's Chambers of Malaysia)

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