Cabotage only contributed 6pc to price hike: Ministry
Published on: Friday, May 15, 2015
Kota Kinabalu: The Industrial Development Ministry on Thursday defended the controversial Cabotage Policy but admitted an overhaul of the logistic sector is needed to bring down prices of goods. Assistant Minister Datuk Bolkiah Ismail said the policy is not entirely to blame for the 20 to 30 per cent increase in the prices of imported goods in the State. He said the policy contributed only six per cent to the increase, while the rest had to do with "unscrupulous traders" composed of "middlemen, agents and wholesalers", marking prices up.
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"They are taking advantage of the situation due to the lack of enforcement," he told reporters, here. Bolkiah said this in response to Federation of Sabah Industries President Datuk Seri Wong Ken Thau, who had again called for a win-win formula to assist local manufacturers, on Wednesday. He said only the authorities such as the Domestic Trade, Co-operatives and Consumerism Ministry can take action and conduct a price watch against those who raise prices indiscriminately. According to Bolkiah, the State government had also submitted a proposal to introduce a logistic subsidy to the Prime Minister to push the prices of essential items and construction materials down for a start.
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As a response is yet to materialise on the subsidy, Bolkiah said the introduction of the logistic subsidy could further reduce the prices of imported goods in Sabah. And to curb indiscriminate price hikes the profit margins of agents and wholesalers or importers need to be capped at 10 per cent on products, he suggested.
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He noted the introduction would certainly boost competitiveness in the prices of imported goods and raw materials for Sabah importers. This will also assist local manufacturers to improve the quality of exports and be competitive in terms of prices in the market, he pointed out. "However, this must be done in a collaborative manner and the government must step in to facilitate such effort," he said. Furthermore, he said the government also planned to boost the infrastructure and efficiency of all port operations in Sabah to boost transshipment operations. He said not only will this cut the cost of transportation in Sabah but also boost the volume of laden containers leaving the local ports to Port Klang. While, the policy is needed to protect local shipping operators who are shrinking in numbers due to the non-competitive market, Bolkiah said Sabah also needs to increase exports to reduce the number of empty containers leaving the ports. He noted that shipping companies have dwindled from 10 to six companies over the last two years.Stay up-to-date by following Daily Express’s Telegram channel.
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