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Monday, February 23, 2009

Federal Territory of Labuan

Today I took a 3-hour ferry ride to the island of Labuan, just off the coast of Sabah.  This is a tiny territory with less than 100,000 people living on 90+ sq km.  One of the first British controlled territory in Borneo, this was once the domain of the Sultan of Brunei.  Indeed, the largest ethnic group of the island remains the Melayu Brunei, or Brunei Malays. 
 
The British took over Labuan to use it as a free port but it was never really successful. Traders avoided it despite tax privileges and its few British civil servants died one and another from malaria. It was at one stage transferred to the protectorate of the British North Borneo Chartered Company but later detached and merged into the Colony of Straits Settlements which also included Singapore, Penang and Melaka.  After WWII, it was remerged with the new colony of North Borneo, which later became the State of Sabah in Malaysia.
 
In 1984, Sabah under the pro-Federation Chief Minister Harris ceded Labuan to the Federal Government to form the new Federal Territory of Labuan, which was soon declared an International Offshore Financial Centre (IOFC).  Sceptics say this was to give the federal government a secure base against the increasingly restive Sabah Christians, while at the same time allowing the federal government to rescue the failing personal businesses of the Chief Minister, who was born on the island.  Christian Sabahans never quite forgive the Federal Government for the loss of Labuan, and soon voted in a rather rebellious state government.
 
The Labuan IOFC was meant to rival Singapore as a safe heaven of funds.  However, like the 19th century attempts to develop Labuan, the IOFC never quite achieved the potential.  It is today but a minor player in the game.
 
I walked around the clean streets of downtown Labuan, once known as Victoria.  Flags and banners everywhere celebrating the 25th anniversary of the establishment of this federal territory.  Ironically, many of the banners depict the current Malaysian prime minister Badawi and his predecessor Mahathir - the latter was the founder of the federal territory but now also the political enemy of soon-to-step-down Badawi. 
 
After a nice Malay lunch (which tasted no different from Malay cuisine in Singapore) and visit to the Labuan Museum and Laburan Square, I decided to return to KK.  The weather was just too hot and humid for further exploration.  Got onboard with a RM 39 first class ferry ticket, I got back to KK...3 hour ferry each way and merely 1hr 45min of walkaround in Labuan.  Whatever it is, I have finally stepped foot on all 16 Malaysian states and federal territories - though I have yet to do meaningful sightseeing in Perlis and Putrajaya.
 
 

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