A tale of two provinces : center-periphery relations and development divergence in Sarawak and West Kalimantan

Abstract

Why did two structurally similar, resource-rich peripheries diverge so sharply in development outcomes? Sarawak in Malaysia and West Kalimantan in Indonesia are neighboring provinces on the island of Borneo that share equatorial ecology, timber endowments, comparable ethnic demographics, and a common history of postcolonial insurgency and Konfrontasi. Yet between 1980 and 2000 their developmental trajectories diverged sharply: Sarawak's poverty rate fell from 56.5 percent (1976) to 6.7 percent (1999) and rural electrification reached 80 percent, while West Kalimantan's poverty stagnated at 27.58 percent (1990) rising to 29.42 percent (2000) with barely 42 percent of households electrified. This study examines how different variation in center-periphery relations explain this gap. Using a qualitative historical-comparative based on the Method of Difference and within-case process tracing, it argues that the peripheral bargaining power: the structural capacity of a peripheral government to secure proportional resource revenue, negotiate development priorities, and local government with locally oriented actors, constitutes a highly plausible causal explanation. Peripheral bargaining power is operationalized across three dimensions: political orientation of local government, fund allocation, and development projects. Sarawak's constitutionally protected resource authority, formula-based fiscal transfers, and electoral indispensability to the federal coalition produced high bargaining power and population-serving development; West Kalimantan's military administrative occupation, fully discretionary transfers, and absence of any electoral mechanism produced low bargaining power and a structured extraction system. The finding shows that subnational development outcomes are determined by the degree of peripheral bargaining power.