Research

Siti Marsila Mhd Ruslan · Kasypi Mokhtar ·Jurnal Ekonomi Malaysia ·2020

This study examines the price differences between Peninsular Malaysia and Sabah from 2004 using quantitative and qualitative methods. For quantitative research, we employ disaggregate monthly consumer price indices for nine types of goods and services. Based on the Johansen co-integration test, the results reveal that the long-run relationship only exists for transport group. The findings using Granger pair-wise causality test indicated that the prices in Peninsular Malaysia do not determined the price in Sabah. Qualitative research was further conducted via interviews with stakeholders of shipping providers, port authority, government and special interest group show that the price disparity between Peninsular Malaysia and Sabah occurred due to trade imbalance, sluggish economic activities, poor accessibility between port and retailers, insufficient infrastructure and technical facilities and political sentiment.

Siti Marsila Mhd Ruslan · Gairuzazmi M. Ghani · Haniza Khalid ·Institutions and Economies ·2019 ·JEL: R49; L91; L98

The Malaysian government introduced a cabotage policy in 1980 to protect and enhance the competitiveness of the Malaysian shipping industry. The policy requires all foreign vessels to unload at Port Klang, the designated national port, after which only Malaysian-flagged vessels can carry cargo to other ports in Malaysia. The policy was criticised for creating additional freight costs to importers and for allowing domestic shippers to monopolise the market. Critics claimed that the higher rates for transhipment services were subsequently passed on to the consumers resulting in higher prices of goods and services. This study examines the influence of Malaysia’s cabotage policy on prices and competitiveness of the shipping industry in the state of Sabah. This study used stakeholders and force-field analysis to examine the influence of the cabotage policy. The stakeholder analysis identified four different stakeholder groups, examined their positions, and rate their positions on the influence of cabotage policy using force-field analysis technique. The analyses show that the cabotage policy was not the only factor causing high prices. Port conditions, efficiency, level of infrastructure, trade imbalance, and political will must also be addressed to remedy the issue.