KUALA LUMPUR: The government's "cabotage policy", a major contributor to higher goods prices in Sabah and Sarawak, was implemented as a strategic policy, the Dewan Negara was told yesterday.
Deputy Transport Minister Datuk Abdul Rahim Bakri said the policy was implemented in the early 1980s to develop the local shipping sector.
"There are other countries which practise this policy actively," he said when responding to a question from Datuk Maijol Mahap on whether the government was still defending the policy despite widespread complaints by Sabahans.
However, Abdul Rahim said a liberalisation of the policy, done in 2009 under former transport minister Datuk Seri Ong Tee Keat, now allowed foreign vessels to travel to ports in Sabah and Sarawak.
The Cabotage policy requires all domestic transshipment be done using Malaysian-flag bearing vessels, which had contributed to rising shipment costs and subsequently higher costs of goods in East Malaysia.
Despite the relaxation of the policy in 2009, many East Malaysians are still demanding that the policy be done away with.
Abdul Rahim said that Deputy Prime Minister Tan Sri Muhyiddin Yassin had already announced that a Cabinet committee will look into complaints that the policy contributes to the increase in the price of goods in Sabah and Sarawak.
"The committee will looked into the problem holistically, and try to come up with a fair and balanced solution for Sabah and Sarawak," he said.
Maijol said that Sabah can become a regional shipping hub if the policy, which effectively requires foreign ships to dock in Port Klang, is done away with.
"We are closer to China, Taiwan and Hong Kong, from where most our shipped goods come from," he said, adding that the policy's implementation by other countries could not be used as an example.
"Other countries have trains and roads. But in Sabah and Sarawak, the only way is by water," he said.
(Cabotage is the carriage of cargo between two points in a country by a vessel or vehicle registered in another country. Permission to engage in cabotage is, in general, strictly restricted in every country.)