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 9. "Communications" is a comprehensive word which covers the transportation of people and goods by land, air and water and the transportation of messages by similar channels. Postal, telegraphic and radio communications are natural Federal subjects, so are air, road and water transportation as between States. Air, road and water transportation within Sarawak might well however, be a matter in which both State and Federal Governments have functions and responsibilities. In other words it would be a joint subject.

10. Education is a subject which greatly exercises the people of Sarawak. It is also the largest single item in the budget of expenditure, and the item which is growing fastest. Education in Malaya is more advanced than in Sarawak but is developing on similar lines. The school-leaving age there is 15 and this year free universal primary education will be introduced. It may be thought that the quickest way to achieve parity, and to accelerate educational advance in Sarawak would be to leave this as a Federal subject with such reservations as local circumstances may require. This would not affect the present Government policy on the language of instruction in schools.

11. Health lends itself naturally into a division between State and Federal administration, as is at present the case in the Federation of Malaya.

12. It would be desirable that labour legislation should be uniform. Generally speaking, Sarawak is less advanced in this sphere than Malaya and could therefore benefit much from Federal experience.

13. The financial and economic aspects of the incorporation of Sarawak into a Federation of Malaysia are complex and will require expert examination beyond the scope of this paper. Just as North Borneo and Sarawak have recently found it advantageous to conclude a free trade area agreement so will the larger free trade area of Malaysia help to develop the economy by providing a bigger home market for local products. A unit of 10 million people is obviously more viable economically than a unit of 1 million. Sarawak is short of capital. There has recently been very extensive capital investment in Malaya which would no doubt continue in Malaysia and from which Sarawak would benefit. At the recent Consultative Committee meeting the Malayan Delegation has stated that the rate of economic and capital development of the Borneo territories as part of Malaysia would be faster than at present. Malaya has an intensive and rapid programme for rural development which, with adaptation, seems well suited to the needs of Sarawak. Development is a joint subject (i.e., shared by the Federation and the States) and each State has its own development board. With independence, grants from Britain under the Colonial Development and Welfare Act would cease. Britain has been ready to give financial assistance, when this has been shown to be necessary, to other Commonwealth territories after independence and there is no reason to suppose she would not be willing to consider the case of Sarawak in the same way. Aid under the Colombo Plan would continue to be forthcoming as at present. Aid from other sources, such as the International Bank of Development and Reconstruction would be directly available to the Federation of Malaysia as an independent territory. It is important for the individual and for businessmen to remember also that the local and international standing of the currency of Sarawak (the Malayan dollar) rests on the combined strength and viability of all the territories which would make up the Greater Federation and would be secured by entering into a permanent association.

14. On the other hand there would be additional expenses. Sarawak would have to bear its share of the cost of Federal representation abroad and of defence—it would have to do that anyway when independent, and it will be less as part of a larger unit than of a small one. Taxation in some categories is higher in the present Federation of MalayMalaya [sic] than in Sarawak. The probability is that as part of Malaysia national taxes as distinct from State and local taxes in Sarawak would have to go up. The Financial Secretary, in his recent budget speech, has said that this is inevitable even if Sarawak continues for the time being as a colony. Improved services and communications have to be paid for and the price of independence is invariably a bigger budget.