The Malaysian government has reinstated the cabotage policy in Sarawak to protect local cargo shipping companies from foreign competition. Transport Minister Anthony Loke announced the decision, emphasizing the importance of sustaining local businesses and maintaining economic stability in the region.
Rationale Behind the Reinstatement
Transport Minister Anthony Loke stated that the decision to reinstate the cabotage policy was driven by a request from the Sarawak state government. The policy mandates that only Malaysian-registered ships can transport goods to ports in Sarawak from the peninsula and Sabah. This move is intended to support local shipping companies and the ship repair industry based in Sarawak.
Importance of Local Shipping Industry
Loke highlighted the critical role that local shipping companies play in Sarawak’s economy. “There are many shipping companies and ship repair industries based in Sarawak. If there are no domestic ships, how will they conduct business? This will certainly have a significant impact on the country’s economic industry,” he said.
Impact of Lifting the Policy in 2017
The cabotage policy was previously lifted in 2017 to allow foreign vessels to operate between Malaysian ports. However, Loke noted that this change did not lead to a significant reduction in the cost of goods in Sabah and Sarawak. Instead, it introduced adverse effects, such as increased competition from foreign shipping companies, which many local companies could not withstand, leading to bankruptcies.
Exemption for Sabah
While the cabotage policy has been reinstated in Sarawak, Sabah remains exempt. Loke explained that this decision respects the stance of the Sabah state government, which does not agree with reinstating the policy.
Launch of M.V. MTT Bintangor
Loke made the announcement during the launch of the maiden voyage of the M.V. MTT Bintangor, a locally-owned vessel named after a town in Sarawak. The ship is capable of carrying and transporting nearly 1,800 containers between the peninsula, Sabah, and Sarawak. “The Transport Ministry welcomes investments from local shipping companies. The domestic shipping industry is very important, especially during crises, to ensure the supply chain of goods is maintained,” Loke added.
Importance of Domestic Shipping
Loke emphasized the importance of having a robust domestic shipping industry, particularly during crises. Dependence on foreign ships can lead to prioritization of their own interests, including pricing, which can adversely affect local supply chains. “Without it, we would depend on foreign ships. Usually, during crises, they prioritize their own interests, including pricing for using their services,” he said.
Conclusion
The reinstatement of the cabotage policy in Sarawak aims to protect and support the local shipping industry, ensuring economic stability and growth. By restricting the transportation of goods to Malaysian-registered ships, the policy helps local businesses remain competitive and resilient, especially during times of crisis.
