Manufacturing Sector Failure Partly Due to Cabotage

“The Sabah government ought to take a serious look into the cause

of the “failure” of the State’s manufacturing sector and its low GDP contribution rather than putting the blame on others.  If they do investigate, it would not be surprising that one of the contributing factors would be the National Cabotage Policy (NCP)” said Datuk Dr. Jeffrey Kitingan, STAR Sabah Chief and Bingkor Assemblyman in response to the media report by the Minister of Industrial Development who had weighed in on the cabotage issue.

The Federation of Sabah Industries and its past president, Datuk Seri Wong Ken Thau, have done their homework and had voiced their opinions and suggestions on the abolishment of the NCP so that the manufacturing and industrial sectors in Sabah are not stifled from further growth.  They have also given other suggestions to boost the manufacturing and industrial sectors which include establishment of Kota Kinabalu as the regional shipping hub.

“If the Minister care to check, almost all the cooking oil on the shelves of supermarkets, mini-markets and provision shops in Sabah are manufactured in Malaya”.

“Why is this so when Sabah is the world’s 3rd biggest crude palm oil producer producing some 35% of Malaysia’s output with vast tracts of oil palm plantations spread throughout Sabah?” asked Dr. Jeffrey.

There was an instance of one of the world’s largest factories who wanted to consider setting up a factory in Sabah but eventually was put off by the additional shipping costs, both in bringing some raw material components as well as export of the final products via Port Klang.

There is no dispute to investors and manufacturers alike that the cabotage policy for Sabah and Sarawak need to be abolished.   It may not solve all the problems but at least it is a start which will also reduce some of the unnecessary transhipment costs via Malaya which have contributed to higher costs of goods in Sabah.

It has to be reiterated that if the federal government wish that the cabotage policy be continued, then it should adopt the 1-Country 2-System form of administration and maintain the cabotage policy for the ports in Malaya and exclude the ports in Sabah and Sarawak. 

As rightly pointed out by FSI, the removal of the cabotage policy could also lead to Sabah and Kota Kinabalu or Sepanggar Port being developed into the regional hub of the Far East.  Sadly to say, neither the federal government nor the Sabah government has done anything concrete to turn Kota Kinabalu into the regional hub.

Perhaps, the Minister of Industrial Development could get cracking and initiate moves for the regional hub to be turned into a reality in 2016 and in turn see that the manufacturing and industrial sectors grow and be an engine of growth for Sabah and Sabahans.

Datuk Dr. Jeffrey Kitingan

Chairman

STAR Sabah

15 January 201