Goods are more expensive in Sabah and Sarawak because of the federal government's cabotage rules, say Pakatan Rakyat MPs.
PETALING JAYA: Pakatan Rakyat MPs have asked for cabotage rules imposed on Sabah and Sarawak – the reason behind the higher price of goods there – to be relaxed.
They said that the policy set in the early 1980s made sure that all the domestic transport of foreign goods could only be done by Malaysian vessels.
This, according to them, led to excessive shipping costs, and ultimately a higher cost of living in East Malaysia.
“This protectionist policy has led to excessive shipping costs. The restrictive cabotage policy has allowed shipping companies to act as a monopoly,” said several Pakatan MPs.
They were Kuala Selangor MP (PAS) Dzulkefly Ahmad, Lembah Pantai MP (PKR) Nurul Izzah Anwar and Bukit Bendera MP (DAP) Liew Chin Tong.
They added that importers and exporters in Sabah had to pay more than RM1 billion for shipping services as a result, causing prices everywhere in East Malaysia to go up.
The MPs estimated that goods in Sabah and Sarawak were 20% to 30% higher than they were in the Peninsula.
“As a result, consumers in Sabah and Sarawak have to bear the burden of a higher cost of living as producers hike up prices 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,” they said.
In a quick comparison, a manual-gear Proton Persona 1.6 B-Line model will cost RM46,713 in the Peninsula. The very same type will cost RM49,256 in East Malaysia.
Even foods are not spared. People eating out in East Malaysia can expect to pay RM1 or RM2 more for the same meal if it was served in the Peninsular.
Lower wages
If the higher cost of living wasn’t enough, the Pakatan MPs reminded that East Malaysians also had lower wages than their Peninsular counterparts.
Even the federal government, despite these concerns, does not appear to have taken this into account, as seen by Prime Minister Najib Tun Razak’s recent minimum wage announcement.
On April 30, Najib said that the minimum wage for private sector employees in the Peninsula would be set at RM900, while the same employees in Sabah, Sarawak and Labuan would get RM800.
It has been speculated that these issues have caused a number of young East Malaysians to leave their homes for the Peninsula in search of an easier life.
The Pakatan MPs said that as a result, the country’s cabotage policy needed to undergo a ‘full liberalisation’, which they say, would allow importers and exporters in East Malaysia to enjoy low shipping costs.
“This in turn would translate into cheaper consumer goods, and also provide a boost to the local SMEs,” they said.
This policy was necessary because only a small number of Malaysian registered ships were playing the coastal routes. The purpose is to encourage local participation in domestic by encouraging local registration of ships and local incorporation of companies participating in domestic shipping. Howeverr there is need to review the policy to ensure that its still relevant to the current needs.
ReplyDeletesabah-go-green.blogspot.com
Govt was fully aware of complaints that the policy was stifling the State economic growth, particularly in the manufacturing sector.
DeleteIt will be better if the foreign ships can dock in Sabah and Sarawak ports without having to go through Port Klang, it would make things much simpler and cost of goods can be reduced.
ReplyDeletesabah-go-green.blogspot.com
Govt want every part of the country to grow economically and that is why the ministry need to look into these issues
ReplyDeleteisu cabotage ini akan dibawa ke parlimen, harap ia dpt dikaji dan wujudkan polisi yang lebih baik.
ReplyDeleteDeputy Prime Minister Tan Sri Muhyiddin Yassin said he will propose for a special cabinet committee to be formed to look into the cabotage policy and other issues related to the price disparity between Sabah and Peninsular Malaysia.
ReplyDeleteHe said he would bring the matter up to seek approval from Prime Minister Datuk Seri Naib Tun Razak.
Delete“The paper on cabotage policy will come back next week, which is rather timely. We will propose that a committee be set up to really look beyond what has been discussed so far, to look into details, what needs to be done and taken into account,” he said.
DeleteMuhyiddin said the cabotage policy, which has long been blamed for the higher cost of living in Sabah, is of special interest to the Federal Government, just as it is to the State Government and business community in Sabah.
DeleteThe policy, together with the higher prices of goods in the state, has been brought up and discussed in Parliament on many occasions, but no tangible solution has been achieved so far, he said.
Delete“We were so engrossed in discussion throughout the dinner that we did not realize what was going on around us. I asked what’s the biggest matter of concern to the business people in Sabah, I already knew the answer but I just wanted to be sure, and the answer was cabotage policy.
Delete“I want to assure you that the issue is also a matter of interest to us at the federal level, with members of parliament from Sabah having repeatedly brought this up for discussion.
DeleteMuhyiddin also noted there has been contention that the glaring disparity in the prices of goods between Sabah and Peninsular Malaysia is not due to the cabotage policy but to complex economic factors. The role of the special committee, he said, should therefore include identifying and investigating all these factors as well as proposing viable solutions that could be implemented to overcome them.
ReplyDelete