PETALING JAYA: Now that Malaysia has been bypassed in yet another undersea cable project, economists are calling for the reinstatement of the cabotage exemption for foreign vessels wanting to carry out undersea repairs.
They say the new government that the King is poised to appoint would be wise to reverse the revocation of the exemption, which was done under the Muhyiddin Yassin administration’s watch.
In the latest chapter in the cabotage saga, Facebook and Google have announced that their new subsea cable, aimed at boosting regional connectivity, would bypass Malaysia entirely.
Malaysia Internet Exchange and the Malaysia Digital Economy Corporation said the tech giants’ decision was proof the revocation was pushing investors away at a time when digitalisation was being touted as a key factor in Malaysia’s economic growth.
Benedict Weerasena, an economist at Bait Al-Amanah, said the next government must set policies that would be consistent with the country’s stated goals so as to not send mixed signals to potential investors.
“For instance, the current cabotage policy concerning maintenance and repair of subsea cables is not consistent with the aim to have the highest number of submarine cable landings in Southeast Asia by 2025 under the MyDigital framework,” he said.
He said Putrajaya could not afford to have policies that would cause the country to lose out to regional competitors and would hamper the progress of the country’s digital economy.
Geoffrey Williams of Malaysia University of Science and Technology said the revocation of the exemption was costing the country billions of ringgit in investments, but added that it was not just because of this that it should be reversed.
“It is bad for Malaysia to be running protectionist policies,” he said. “This affects the overall investment perception and makes Malaysia look unfriendly to foreign investors. If the restrictions are in place, they will just go elsewhere.”
He said whatever money the government could make from taxes on foreign vessels or fees for licences would be negated entirely by the loss of investment and the job opportunities such a large project would create for Malaysians.
“When technology firms, leading government technology agencies and politicians all agree that something should be scrapped, that is usually a good sign it needs to change,” he said.
“Competitive markets which are open to trade and foreign investors are better than protectionist policies. This is the way forward.”