By Harizah Hanim Mohamed
KUALA LUMPUR, March 5 (Bernama) -- Malaysia’s cabotage policy was designed to promote and develop a strong national shipping-owning industry while minimising the nation’s reliance on foreign vessels and the outflow of foreign exchange in the form of freight payments.
However, as the digital economy thrives and results in billions of daily online connections among people, businesses, devices, data, and processes, what is the best way forward? Should we continue to retain the cabotage policy to promote local shipping businesses, or should we choose to provide an exemption for submarine cable repair vessels to ensure that our country does not fall behind amid the rapid growth of the new economy?
The topic has always surfaced when it comes to communication and maritime matters, especially as global activities innovate and it involves the submarine cable network, an integrated system of cables collectively providing data transfer from one land-based location to another and carries around 90 per cent of the world’s cross-continent data traffic.
The submarine cable network is regarded as the most valuable cable for some of the world’s mega companies, from Amazon to Google.
Domestically, the issues are widely discussed and as the governments have changed multiple times, it affects the cabotage policy, as different leadership may have different visions and leadership focus.
Under the current unity government, Transport Minister Anthony Loke Siew Fook in January hinted at reviewing its cabotage policy restrictions for submarine cable repair vessels, a move that could potentially lead to the opening up of Malaysian waters to foreign-flagged ships providing such services.
In a reply to a question from “The Edge” on whether the government was reviewing the cabotage policy with regard to submarine cable repair vessels, he replied, “Yes (the government is looking to review the existing cabotage policy),” without elaborating further.
Digital economy, FDI and challenges
Universiti Malaysia Terengganu policy studies and development policy lecturer Dr Abdul Rahman Abdul Latip said the cabotage policy exemption is seen to contribute significantly to Malaysia’s digital economy and increase the country’s competitiveness, as well as attract more foreign direct investment (FDI) into the country.
This coincides with the country’s MyDIGITAL aspiration to transform Malaysia into a digitisation-driven high-income country and a regional leader in the digital economy.
“This strategy is also deemed to promote the shipping sector and safeguard national security. To guarantee that the issue affecting the implementation of the cabotage policy does not alter the direction of the country’s digitisation, the perspectives of all stakeholders engaged are critical in ensuring a win-win situation for the country and industry players,” he said.
As Malaysia currently lacks local talent in submarine cable repair, Abdul Rahman stressed that the government should provide incentives to encourage local shipping businesses to establish capacity and human resources in order to satisfy the standard requirements of activities such as underwater cable maintenance.
“Otherwise, we will continue to lag behind and continuously rely on foreign technology and technical expertise,” he said.
In his perspective, national consultant to the United Nations Ang Chin Hup stated that the challenges of the cabotage policy are not limited to Malaysia, as ASEAN countries are unwilling to compromise their cabotage rules, resulting in the sluggish implementation of the ASEAN Single Shipping Master Plan.
“It may not decrease economic integration among member nations because ASEAN member countries compete for economic growth, but ASEAN’s economy may be better with shipping and trade integration, and the region could be better positioned to negotiate and trade like the European Union,” he said.
From the perspective of maritime, Malaysia Shipowners’ Association (MASA) chairman Mohamed Safwan Othman said the telecommunications industry aims for faster service delivery, and with regards to this, with undersea cable repair, it has been noted through several articles that cabotage seems to be the focus since it is deemed the culprit for Malaysia’s cable repair response time.
“MASA believes that cabotage is not the primary reason for this and might not be the reason at all,” he said, adding that MASA is aware of the review of the cabotage policy.
“Although it is only quoted, however, we are fully supportive of digitalisation development in the country, with particular emphasis on developing Malaysia’s fleet to cater towards the market.
“Being the backbone of global trade, maritime is one of the forerunners in digitisation. MASA supports this through the International Maritime Organization meetings and adopting the ideas locally, and we are willing to have a dialogue or debate this problem with all stakeholders, including the National Tech Association of Malaysia (PIKOM),” he noted.
Mohamed Safwan stated that it is MASA’s responsibility to disseminate accurate information about the cabotage policy.
Developing local talents
Maritime is a capital-intensive industry, and becoming a strong local player takes time and money. Investments are required to develop this, and it will aid Malaysia in addressing its current balance of payments deficit of RM32 billion.
Hence, it would also be useful if the National Tech Association of Malaysia (PIKOM) could listen to the idea of boosting local skills, notably in the shipping industry.
PIKOM chairman Ong Chin Seong stated that the association welcomes the news that the cabotage exemption policy is being reviewed and that while details are still unavailable, this will bode well for Malaysia as the country strives for digital aspirations, including investments in submarine cable connectivity on Malaysia’s shores.
“This will also help strengthen the confidence of international tech businesses in investing in Malaysia and in accordance with our ambitions of the MyDigital Blueprint to attain a 25.5 per cent digital economy contribution to the economy.
“We can be certain of constant, fast, and dependable internet connections, especially for traffic in and out of the nation, with quick response and maintenance and more underwater cable finding its way to Malaysia,” he added.
Yet, as of the date of this article, despite the fact that the cabotage affects various businesses, there is no direct engagement between the industries or interested organisations.
Despite this, both PIKOM and MASA are encouraging any debate or discussion on the cabotage policy.
-- BERNAMA
TAGS : MyDigital, PIKOM, MASA, Cabotage policy
HHM SM RAMS
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