Labuan will still rely on Sabah after cabotage scrapped
As to whether the abolishment of the cabotage policy, beginning June 1, will benefit the island would still depend on traders from the mainland who were the price setters of goods. Datuk Seri Mohd Alias Abd Rahman, Labuan Chamber of Malay Entrepreneurs president
LABUAN: The abolishment of the more than 30 year-old cabotage policy is set to benefit this duty- free- island economically, especially consumers and traders here.
This is because the island has been heavily dependent, for decades, on imported food items from mainland Sabah.
Labuan Chamber of Malay Entrepreneurs president Datuk Seri Mohd Alias Abd Rahman said the price of essential goods, including construction materials, were traditionally set by manufacturers, wholesalers and importers from the mainland.
“As to whether the abolishment of the cabotage policy, beginning June 1, will benefit the island would still depend on traders from the mainland who were the price setters of goods.
“As reported, the price of goods in Sabah is relatively higher, about 20 to 30 per cent more, than in Peninsular,” he said in a statement yesterday.
Alias said the duty-free-island in 1980’s was once a shopping heaven with many branded electrical items, clothes, fabric, cameras, shoes and others sold cheaper than elsewhere, hence attracting increased trade volume and visitors.
The status was no longer enjoyed after the island stopped receiving direct shipment of goods due to less cargo volume.
Alias also said the Labuan Liberty Port would only benefit from the abolishment of the cabotage policy if there was a high volume of cargo to be shipped to the island.
“As far as we are concerned, for more than a decade, the port handled almost 90 per cent of materials, chemical products for the oil and gas sector and only five to 10 per cent were food items.
“As such, there must be a constantly high volume of cargo (consumer products) shipped to the island here.
“Now, the island is heavily dependent on mainland Sabah for various resources, as Labuan being an international offshore financial centre, had no major food factories like rice and sugar established here for exports activities,” he said.
As such, he reiterated that the abolishment of the cabotage policy would only benefit the island if traders and transporters in Sabah revise downwards the price of goods as the price of transporting container or cargo would drop significantly,
Prime Minister Datuk Seri Najib Tun Razak, on May 7, announced the exemption of the cabotage policy for Sabah, Sarawak and Labuan, beginning June 1, 2017.
The cabotage policy was introduced on Jan 1, 1980 with the aim of protecting and promoting a strong national ship- owning industry.
Under the policy, only vessels registered in Malaysia are allowed to load and unload cargo in all domestic ports. — Bernama