Govt urged to look at bigger picture in cabotage decision
SIBU: Sarawak Shipping Association has called on the state government to ‘ look at the big picture’ that affects the prices of goods before making a final decision on the cabotage policy.
Its chairman David Chung said there was every possibility that the abolishment of the cabotage policy will put Sarawak on the losing end.
“For the government to see who really benefits from the abolishment of cabotage, it needs to look at the macro picture. Too often, we are bogged down with micro details.”
“Instead of looking at the big picture and the part Sarawak plays in the big picture, we have been looking only from Sarawak’s perspective.”
“We need to change our angle now. We need to see Sarawak within the big picture - in Malaysia
For the government to see who really benefits from the abolishment of cabotage, it needs to look at the macro picture. Too often, we are bogged down with micro details.
and even in Asia and what is the true effect of cabotage on Sarawak and the real factor affecting price disparity between Sarawak and Peninsular Malaysia,” Chung told The Borneo Post yesterday.
He said it is often believed that the abolishment of cabotage will benefit Sarawak, Sabah and Labuan, especially in terms of fast-moving consumer products (FMCG) such as milk, Milo, cheese and others.
“But let us look at the population distribution for Malaysia. Based on the latest statistics of July 2016 released by the Department of Statistics Malaysia, Malaysia has a total population of 31.2 million, and Sarawak only accounts for 8.7% of the total population.”
“Any importer of FMCG, or trading house would prefer Port Klang as their destination where there is a high concentration of population, and not ports in Sarawak.
“Even with the abolishment of the cabotage policy, goods will still be imported to ports in Peninsular Malaysia first, before being ‘ re- exported’ to smaller markets like Sarawak, simply because it is more cost efficient to do so.
“And we have not even compared the purchasing power of cosmopolitan city dwellers and ( people of) Sarawak, where 75 per cent of the population still reside in rural areas.”
Chung said after goods are imported into Sarawak, the items further needed to be transported to the final destinations.
“Sarawak is huge and the inefficient logistics will inevitably raise the distribution cost, which results in even higher cost of FMCG,” he said.
Chung also pointed out that even within Klang Valley itself, the same commodity may be priced differently among the same chain supermarkets situated in different locations.
“It is obvious that there are many other factors affecting prices of goods. Cabotage policy perhaps is one of them or may not even be one of them,” he said, adding the assumption that the abolishment of cabotage would result in cheper goods in Sarawak may not be accurate.
David Chung, Sarawak Shipping Association chairman