Labuan Umno has called for an end to the debate over whether Labuan should be returned to the jurisdiction of the Sabah government. Labuan Umno chief Datuk Mohd Rafi Alli Hassan highlighted the significant economic growth and development that Labuan has experienced since it came under federal administration in 1984.
He pointed out the thriving oil and gas (O&G) and financial sectors on the duty-free island, as well as the presence of important economic drivers such as Petronas Methanol and tertiary education institutions. Rafi emphasized that Labuan’s status as a federal territory has been crucial in fostering its development, with 86 government agencies currently operating on the island.
Rafi cautioned against politicizing the issue, stating that Labuan’s economic sectors are faring better than many districts in Sabah. He addressed concerns about economic challenges faced by Labuan, such as water and power disruptions, and an economic slowdown, emphasizing that these issues should not be used as grounds for returning Labuan to Sabah.
He noted that the island experienced economic difficulties in 2018 due to falling crude oil prices, which resulted in downsizing and job losses. The Covid-19 pandemic further exacerbated these challenges, along with new customs policies affecting the economy.
Minister in the Prime Minister’s Department (Federal Territories) Dr. Zaliha Mustafa reaffirmed the integral role of Labuan within the federal territories’ framework and dismissed suggestions for its return to any other entity as irrelevant. The issue was raised in Parliament following Tuaran MP Madius Tangau’s inquiry about the federal government’s intentions regarding Labuan’s status.
The concerns raised included issues related to essential needs such as water and electricity supply, as well as the governance of key economic entity Asian Supply Base Sdn Bhd (ASB) under the state government. Former Sabah chief minister Datuk Yong Teck Lee has also voiced support for Labuan’s return to Sabah.
