Once Sabah’s timber and palm oil capital, the east coast town of Sandakan now moves at half pace.

At Bandar Kim Fung market, the coffee still flows, but the young are gone. Older residents linger over cups, trading stories about their children doing well in Singapore or Kuala Lumpur as they spend their mornings out shopping for groceries.

In the housing estates, large houses still rise behind tall gates, reminders of...