Labuan MP Rozman Isli, troubled by the speculation, disclosed that he had sent a note to the Federal Territories Ministry seeking urgent clarification on the future of the island, which was designated as an International Offshore Financial Centre (IOFC). “Labuan would be doomed if its free port status was scrapped.
“It will be a double blow. The scrapping of the island’s free port status will further aggravate its economic woes.”
Labuan, pointed out the MP, has already been hit hard by the crude oil market plunging from over USD100 per barrel to less than USD30 per barrel. “This has led to business shrinking by 40 per cent. Thousands have left the island after having been retrenched and not having any alternative jobs readily available.
“Jobs are not easy to come by in Labuan outside the oil and gas industry. Most of the IOFC activities are being carried out in Kuala Lumpur and not in Labuan.”
Rozman hastened to add that speculation on the future of Labuan should not be taken too seriously at the moment. “Wait for a government announcement.”
He recalled that talk of Labuan losing its free port status first surfaced in 2011 when then Federal Territories Minister Raja Nong Chik complained that the Federal Government was losing a lot of revenue allegedly due to smuggling activities conducted from the island.
Taking away Labuan’s free port status, warned Labuan Chinese Chamber of Commerce (LCCC) Chairman Wong Kii Yii, was like “pulling the carpet from under our feet. Maintaining the free port status was one of the promises of the Federal Government when the island was turned into a Federal Territory”.
He pointed out that Labuan was the oldest free port in the country, with the other two being Langkawi and Tioman. “Penang lost its free port status when it became industrialized.
“We don’t have industries like Penang. If Langkawi and Tioman are allowed to maintain their free port status, there’s no reason why Labuan should be stripped of the status. If the Federal Government wants to abolish this status, it should be discussed with all stakeholders.”
Wong ventured that instead of targeting Labuan under revisions to Budget 2016, the Federal Government should exercise financial prudence. “The BR1M payout of RM5.9 billion to 4.7 million households and 2.7 million individuals can be used to subsidize water and electricity charges, fuel prices and provide educational aid for more than 20 million people.”
Elsewhere, the LCCC Chief urged the Federal Government to scrap projects in the country that are not urgent or that have no high impact for the people. “This is one way to tackle the fall in government revenue from oil and gas.”