By Datuk Ts Dr. Hj Ramli Amir, former President of the Chartered Institute of Logistics and Transport (CILT) Malaysia and Vice-President of CILT International for Southeast Asia
Part 4: The Sabah Shipping Accord
KOTA KINABALU: – A Blueprint for Sovereignty and a Borneo Hub
The 2017 cabotage exemption was a crucial intervention, a first aid measure that stanched the bleeding of Sabah’s economy. However, it is not a cure for the deep-seated, structural ailments born from decades of logistical isolation.
To transition from a fragile recovery to a resilient and sovereign economic future, Sabah must champion a comprehensive and visionary strategy—a “Sabah Shipping Accord.” This blueprint is built not on sentiment, but on four pragmatic and interconnected pillars designed to re-engineer the state’s position within global maritime networks.
Pillar 1: The Phased Approach – Strategic Incrementalism as a Catalyst
Action: The immediate priority is to table a proposal for a time-bound, five-year full exemption from all cabotage restrictions for the state of Sabah. This should be strategically framed not as a permanent repeal, but as a “National Logistics Pilot Project for Eastern Malaysia.” The proposal must include a mandatory, independent economic impact review to be conducted before the five-year term concludes.
Impact: The inclusion of a “sunset clause” is a masterstroke of political and economic strategy. It transforms the proposal from a perceived permanent risk into a manageable, evidence-based policy experiment, making it far less politically contentious to approve at the federal level.
This provides Sabah with a critical, uncontested window to demonstrably prove the exemption’s benefits: plummeting consumer prices, surging business competitiveness, and increased regional trade.
The result would be the creation of an undeniable body of evidence and powerful economic momentum, making the case for permanence irrefutable.
Pillar 2: The Infrastructure Leap – Forging the 21st-Century Gateway
Action: Concurrently, Sabah must launch the “Sabah Gateway Project,” a transformative infrastructure initiative funded through a national-public-private partnership (N-PPP).
This project must move beyond basic maintenance and focus on strategic enhancements: dredging channels and deepening berths to accommodate larger vessels, installing super-post-Panamax cranes to handle the world’s largest container ships, and implementing fully integrated digital port management systems for seamless logistics.
Impact: Modern infrastructure is the non-negotiable bedrock of global competitiveness. This leap would dramatically reduce vessel turnaround times, attract larger and more efficient ships, and lower per-unit costs for all users.
This creates a virtuous cycle: lower costs attract more cargo, which in turn justifies more frequent and direct shipping services, further driving down costs and solidifying the port’s hub status.
Pillar 3: Beyond Logistics – Fuelling the Engine with Home-Grown Cargo
Action: Logistics alone cannot create sustainable demand. The state must actively catalyse the creation of its own export cargo by establishing a “Sabah Maritime Economic Corridor.” This policy framework would provide targeted incentives—such as tax holidays, streamlined approvals, and strategic land allocation—for export-oriented industries that generate high-volume, high-value containerized cargo.
Key sectors include advanced agro-processing (turning palm oil and agricultural products into finished goods), aquaculture, and light, high-value manufacturing.
Impact: Home-grown export cargo is the fundamental fuel for a sustainable shipping ecosystem. It provides the consistent, balanced trade volumes that make shipping routes profitable and reliable for global carriers.
Instead of being a net importer reliant on others, Sabah transforms into a balanced trade partner, making direct calls by international mainline vessels commercially irresistible.
Pillar 4: The East Malaysian Alliance – A Partnership of Necessity and Strength
Action: Sabah need not build this future alone. It must proactively forge a formal “East Malaysian Shipping Alliance” with Sarawak, leveraging the established capacity and expertise of its neighbour’s shipping giants. In this partnership, Sabah would offer preferential port terms and serve as the northern gateway, while Sarawak provides shipping capacity, operational expertise, and established regional networks.
Impact: This alliance is a force multiplier. Sabah gains immediate access to world-class maritime capability and scale without the prohibitive cost and risk of building its own fleet from scratch.
A united East Malaysian bloc possesses significantly more negotiating power to secure fair freight rates and ensure service stability, insulating both states from the volatility of global shipping markets.
Conclusion: From a Fragile Recovery to a Resilient Future
The “Sabah Shipping Accord” is more than a list of demands; it is a sophisticated, phased blueprint for national economic improvement. It offers the federal government a low-risk, high-reward pilot project with tangible benefits for the entire nation.
For Sabah, it represents the definitive pathway to shed its historical role as a perpetual recipient of flawed policy. It is the challenge to become the architect of its own prosperous, connected, and resilient destiny—a future where it is not defined by its constraints, but by its capacity as a gateway and an economic powerhouse in the heart of Southeast Asia.
Analysis: Sabah’s Future – A Crossroads of Promise and Prudence
Sabah stands at a pivotal juncture. Its future is not predetermined but will be shaped by the strategic choices it makes today. The path forward is fraught with challenges but brimming with unparalleled promise.
The Promise:
The potential is immense. By successfully implementing a strategy akin to the “Sabah Shipping Accord,” the state could undergo a profound economic transformation. It can evolve from a peripheral outpost to a dynamic regional hub for the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA).
This would unlock not just logistical efficiency, but entire new industries in logistics, finance, and value-added manufacturing. The high cost of living, a long-standing burden on its citizens, could be systematically dismantled. Furthermore, economic sovereignty in trade would foster a stronger sense of agency and political maturity, positioning Sabah as a key player in national and regional affairs.
The Prudence:
Realizing this vision requires navigating significant headwinds. The infrastructure deficit is a tangible and costly barrier that requires billions in investment and political will.
There is a risk of bureaucratic inertia and resistance from established interests that have benefited from the status quo. Success is also contingent on the often-unpredictable winds of federal politics and national economic priorities.
Finally, Sabah must compete in a competitive regional landscape, where ports in Indonesia and the Philippines are also vying for hub status.
Final Thought:
Sabah’s greatest asset is no longer just its natural resources, but its geostrategic location—an asset that was rendered worthless by flawed policy for decades.
The challenge now is to weaponize that location through smart policy, strategic investment, and relentless execution. The journey from a “feeder” to a “hub” is a monumental one, but the 2017 exemption proved that change is possible.
The future of Sabah hinges on its ability to build a compelling, evidence-based case for its own centrality—not just to Malaysia, but to the thriving economic region it calls home. The blueprint is clear; the will to build it remains the decisive variable.
