'Monopoly' in shipping services caused higher living costs in Sabah and Sarawak
The Pakatan Rakyat Manifesto/Policy Committee is of the view that the higher cost of goods in Sabah and Sarawak can be partly attributed to the Ministry of Transport’s National Cabotage Policy implemented since the early 1980s.
The policy stipulates that domestic shipping between Malaysian ports should be restricted to Malaysian-owned ships to protect the local shipping industry.
Unfortunately, this protectionist policy has led to excessive shipping costs. The restrictive cabotage policy has allowed shipping companies to act as a monopoly giving no room for fair competition within the industry to bring about fair prices.
Monopoly and unfair competition
According to the Federation of Sabah Manufacturers (FSM), importers and exporters in Sabah are paying more than a billion ringgit a year for these shipping services.
As a result, consumers in Sabah and Sarawak have to bear the burden of higher cost of living as producers hike up prices in order to compensate the increase in cost of production. This also poses problems to the local Small and Medium Enterprises (SMEs). They are suffering and suffocating as a consequence of the rising production costs.
Also, in the face of low wages, higher prices means lower quality of lives for Sabahans and Sarawakians. Currently, the prices of goods in Sabah/Sarawak are 20 to 30 per cent higher than those in the Peninsula.
As a solution, a “full liberalisation” of the cabotage policy would give importers and exporters in Sabah and Sarawak an opportunity to enjoy low fare due to competition in the shipping transport sector. This in turn would translate into cheaper consumer goods, and also provide a boost to the local SMEs.
Therefore, the Pakatan Rakyat Manifesto/Policy Committee promises to fully liberalise the National Cabotage Policy in line with our stand to fight against monopolies that reap profits at the expense of ordinary Malaysians.