Monday, March 9, 2009

Cabotage and federalism

Not many Malaysians are away or, even bothered with the existence of a cabotage shipping policy in Malaysia.

Apparently, under the cabotage shipping policy, implemented since 1980, domestic trade between any two ports within the Malaysian federation can only be served by Malaysian-owned shipping companies registered in Malaysia's shipping registry.

The cost components for the transportation of goods include freight charges, port charges, forwarding fees, haulage or transport charges, storage charges and terminal handling service costs.

Goods costs more in Sabah and Sarawak
It is a fact wearily accepted by fellow Malaysians in Sabah and Sarawak that the same packet of instant noodles cost more than the prices in Semenanjung Malaysia.

Obviously transportation costs are one key factor.

But, if the incidence of poverty is said to be very high in Sabah and Sarawak, couldn't the federal government do more to reduce the obvious price differences?

The irony is that Sabah and Sarawak contribute oil and gas revenues to the federal coffers via the Petroleum Development Act.

The economics of federalism
It is high time that the federal government conduct a serious accounting of the reasons for the price discrimination between Semenanjung Malaysia with Sabah and Sarawak.

More importantly, the federal government should take active measures to institute pricing parity so that the same packet of instant noodles will cost the same anywhere in Malaysia. Saying that distance is a cost factor will not be acceptable past a point.

The irony and central and driving fact should be that the further a citizen lives from the administrative capital and great commercial centres, the more help that citizen needs. This is a fact.

Trust me, it will become a big bugbear as the economy contracts.

I also seem to recall that after the General Elections of March 8 last year, the BN components in Sabah and Sarawak appear to have delivered their part of the bargain.

It's a good time to listen to these working level complaints before they rise to political level complaints.

This, to my mind, is the proper mindset when dealing with federal-state matters.


walla said...

Bravo; for too long, the people of Sabah and Sarawak have been neglected disproportionate to their contributions to the national coffers.

Even cabbage going to them cost too much.

Important issues federal don't seem to focus.

Anonymous said...

Cabotage policy is not specific to Malaysia. Even Indonesia and the often said far, far, far superior USA or Japan, or Korea or China have Cabotage policy. (In the USA it goes one further, the ships has to be built in USA also).

In fact Korea an Japan, for example, all shipping companies in those countries must be CLASSED with national calls society. Malaysia do not even adopt those protectionist policy.

Cabotage policy do not hinder competition. Shippers still have to reduce their cost in order to get transport orders.

Then one might argue, why not make it free for all? Then there will be issues regarding safety of ships and manning. On can reduce these cost but the down side is safety - use substandard sailors and Flag of convenience ships.

If cabbage price is the issue, why with plenty of land in Sabah & Sarawak, you guys did not plant them.

With regard to price, there are multidemntional facted issues that need to be studied, before jumping to conclusion.

MRSM Kalae Chepo 66/73

deck said...

But you can't mandate a fixed price like that? Who's going to make up for the difference?

Raison D'etre said...


The second stimulus: RM60 fuc$ing billion!

Mak Oi... How much of a deficit is that.

Shitty thing is that there no convenient site to read ala the one done by Singapore's budget.


RM60b. Its a whole new budget.

Man o Man!!