| KUALA LUMPUR, March 5
KUALA LUMPUR, March 5 When dozens of armed
Filipinos landed by boat on Malaysia's part of Borneo island
last month claiming to be a "royal army" and pressing an obscure
historic claim, it seemed like a bizarre incident that would
soon be resolved and forgotten.
Three weeks later, 27 people including eight Malaysian
policemen have been killed, sparking a political crisis ahead of
elections for both the Philippine and Malaysian governments and
raising concerns of instability in resource-rich Sabah state.
While the violence has been contained so far to a small
corner of Sabah, it signals that militants left out of a peace
deal between Manila and the Philippines' main Muslim rebel group
could be renewing their focus on the region.
Prolonged insecurity could also affect Sabah's huge palm oil
industry and dampen growing investor interest in energy and
infrastructure projects in the state, although the main oil
fields are far from the trouble.
The group, numbering about 180, say they are descendants of
the sultanate of Sulu in the southern Philippines, which ruled
parts of northern Borneo for centuries. They are demanding
recognition and an increased payment from Malaysia for their
claim as the rightful owners of Sabah.
The violence presents Malaysian Prime Minister Najib Razak
with a security headache that could delay an election that must
be held by June, adding to nervousness among investors over what
could be the country's closest ever polls.
Leaders of the ruling United Malays National Organisation
(UMNO) were discussing delaying the election until beyond April,
a senior UMNO official told Reuters. Malaysia's parliament must
be dissolved for elections by the end of April, but Najib had
been expected to hold the polls as early as late March.
"It will be difficult to hold elections with such a
situation going on in Sabah," the UMNO official said.
"Not only is it a security issue, it is going to be a huge
election issue that the opposition will manipulate."
Oil majors such as ConocoPhillips and Shell
have poured in billions of dollars to develop oil and gas fields
in Sabah. Chinese companies have been investing in hydro-power
and coal mining, and Sabah is a popular tourist spot with
pristine beaches, diving sites and rich tropical wildlife.
A standoff with the armed group erupted in bloodshed on
Friday when two policemen and 12 militants died in a firefight
near a coastal village. Violence hit at least two other
locations over the weekend.
IMMIGRATION COMPLICATES CRISIS
Malaysia has rejected the group's renewed claim on Sabah,
which was leased by the sultanate of Sulu to a British trading
company in the 19th century and later absorbed by Kuala Lumpur.
Sulu is a Philippine island chain that lies between Sabah and
the Philippines' Mindanao island. The sultan's family are
traditional rulers, with no formal political powers.
For Malaysia, the crisis is complicated by the illegal
immigration of Filipinos to Sabah, largely to work in palm oil
plantations. Sabah's population has more than quadrupled since
the early 1970s and the Philippine government says about 800,000
Filipinos now live there.
Sabah residents have been transfixed in recent weeks by a
public inquiry into allegations that illegal immigrants were
handed identity cards by UMNO in a citizenship-for-votes scheme.
Much of the population in the area affected by the violence
has cultural and family links to the southern Philippines -- an
hour away by speedboat -- raising doubts over their allegiance.
That could hinder efforts to capture the gunmen and make
immigration an awkward issue for Najib. Voters in Sabah,
traditionally a bastion for the UMNO-led National Front
coalition, could swing the election to the opposition if it can
build on recent gains there.
"The problem Malaysia's government faces is the prospect of
many of these Sulu people having Malaysian identity cards," said
the UMNO source. "Many of them have relatives in Sabah."
Malaysia deported nearly 300 illegal Filipino immigrants on
Sunday, a sign that ties between the neighbours could be frayed.
Philippine Foreign Minister Albert del Rosario flew to Kuala
Lumpur on Monday to urge "maximum tolerance" in dealing with the
remaining members of the group.
The crisis could leave Najib's government open to criticism
of a lax security response for allowing the gunmen to enter and
for not cracking down on them sooner. Forces surrounding the
group initially took a softer approach, even giving them food
when their supplies ran low.
Opposition leader Anwar Ibrahim criticised Najib on Monday
for "weak" leadership on the crisis and called for a special
session of parliament to discuss the situation.
Malaysia sent seven army battalions to the region on Monday
to reinforce police, state media said.
Philippine President Benigno Aquino, facing congressional
elections in May, has come under pressure from opponents for
supporting Malaysia's rejection of the group's claim to Sabah,
which remains a dormant Philippine policy goal.
Aquino's allies in turn have hinted that the political
opposition encouraged the intrusion as a way of undermining the
peace deal signed with Muslim rebels last year and embarrassing
the government ahead of the May elections.
"ROYAL ARMY" ACTING ALONE?
The trouble looks to be partly the result of the deal signed
by the Philippine government and Moro Islamic Liberation Front
(MILF) rebels in October to end a 40-year conflict. That
agreement was brokered by Malaysia.
Jamalul Kiram, a former sultan of Sulu and brother of the
man Philippine provincial authorities regard as the sultan, said
the peace deal had handed control of much of Sulu to the MILF,
ignoring the sultanate.
"I think some groups are trying to throw a monkey wrench in
the peace process and embarrass the government," said Rex
Robles, a retired navy commodore and security analyst in Manila.
Malaysian security officials have said they suspect the
involvement of another Philippine rebel group, the MNLF, which
is led by Nur Misuari, an opponent of the peace deal. They said
the gunmen appeared to be well trained and experienced in
But a senior Philippine security official said Misuari was
not believed to be involved because the group in Sabah came from
the island of Tawi-Tawi, which is not a known MNLF stronghold.
Prolonged violence could affect the huge palm-oil industry
in Sabah, which employs 300,000 legal foreign plantation workers
and many more illegal immigrants from the Philippines and
Indonesia. Palm oil firms are already experiencing transport
delays due to the violence, said one industry official who asked
not to be identified.
(Additional reporting by Siva Sithraputhran in KUALA LUMPUR;
Manuel Mogato in MANILA; Florence Tan in SINGAPORE; Editing by