‘Protectionist’ cabotage policy bad for nation’s image, says economist

 

An exemption allowing foreign vessels to carry out undersea cable repairs was recently removed by the government. (Youtube pic)

PETALING JAYA: An economist says the removal of a cabotage exemption for foreign vessels undertaking submarine cable repairs makes Malaysia appear “unfriendly” among foreign investors.

Geoffrey Williams.

Geoffrey Williams of the Malaysia University of Science and Technology said the move would give Malaysia a bad image for running a protectionist policy favouring local firms.

“This would affect the overall investment perception for Malaysia,” Williams said.

The cabotage exemption had previously allowed foreign vessels to perform undersea repair jobs. However, in November, transport minister Wee Ka Siong revoked the exemption for submarine cable repairs.

The decision drew criticism with Umno deputy president Mohamad Hasan saying the government’s handling of the issue might lead to Malaysia becoming an international joke.

Firdausi Suffian.

Williams urged the government to reinstate the exemption. “If they (government) are concerned about wider implications, then they should have just applied for an exemption as a special case,” he suggested.

He said while it was important for every country to protect its strategically important industries or services, it should only be done to a certain extent.

Political economist Firdausi Suffian of Sabah UiTM said the cabotage policy was irrelevant in the globalised economy. “All protectionist tools are bad for the economy as they distort competition,” he said.

Asked about other protectionist policies in the country that should be reviewed, both Williams and Firdausi raised concerns about restrictions in the automotive industry.

“Protectionist policies surrounding cars are long overdue for removal,” Firdausi said. - FMT