Sabah’s economy: The cabotage policy to be discussed

Supply Chain Asia, a supply chain professional community, are set to hold their 2011 Oil, Gas and Palm Oil Supply Forum in Kota Kinabalu after holding a roundtable meeting was here late last year.

The roundtable discussion, held on October 21 last year, involved industry professionals focused on several key issues and challenges in the industry, such as the Cabotage Policy, rising opportunities in oil & gas as well as palm oil supply chain challenges.

One of the major challenges facing Sabah is the Cabotage Policy – a policy that in its overall execution is believed by some quarters to undermine the development of the Sabah business community.

The Ministry of Transport introduced the Cabotage Policy in 1980 as part of a policy instrument to foster the development of the national shipping industry and also to protect the domestic trade from domination by foreign shipping lines.

Under the Cabotage Policy, implemented on Jan 1, 1980, domestic trading between two domestic ports can only use the services of local shipping lines.

The Cabotage Policy has been raised as one of the reasons for the high cost of logistics in Sabah.

The forthcoming forum will discuss on how Sabah can ride on its natural resources of palm oil and oil and gas to grow its supply chain infrastructure.

Asian economies have been leading the way out of the global downturn, and this has resulted in a tremendous boost to the fortunes of carriers across the region.

Over the past nine months, there has been a dramatic 30.2 per cent growth in international air cargo traffic, compared to the same period the previous year.

The overall outlook for Asian carriers remains very positive over the next 12 months, with prospects for further sustained growth in demand in line with established long term trends.

The Sabah Minister of Industrial Development is expected to launch the Supply Chain Asia’s Oil, Gas & Palm Oil Supply Chain Forum.