Logistics subsidies keep essentials affordable in Sabah, S’wak, say economists

Economists in Malaysia emphasize the importance of logistics subsidies in keeping essential goods affordable for residents in the interior regions of Sabah and Sarawak, where high transport and distribution costs make deliveries more challenging. Universiti Teknologi Mara (UiTM) Sabah economist Firdausi Suffian points out that geographical constraints and limited transport links increase the costs of bringing goods to remote areas, ultimately leading to higher product prices.

The government's 2027 budget earmarked RM250 million for expanding the distribution of essential goods to rural and interior areas, targeting six new locations such as Kampung Terian in Penampang, Sabah, and Kampung Dato' Godam in Pusa, Sarawak. The programme currently covers 1,570 sales locations, with 1,480 in Sabah and Sarawak.

Firdausi highlights that logistics subsidies, combined with other forms of assistance like STR and SARA, help maintain affordable prices for essential goods while supporting household purchasing power. However, he questions if the RM250 million allocation will suffice as the programme expands. UiTM's Tan Peck Leong suggests evaluating the effectiveness of the programme by comparing pre- and post-subsidy prices in targeted areas, rather than just the allocated budget.

He also stresses the need to ensure savings reach consumers and proposes publishing price comparisons in the six newly expanded locations. Tan advocates for collaboration with retailers, wholesalers, cooperatives, and village shops to optimize existing distribution networks, aiming to reduce the price burden on consumers in interior regions of Sabah and Sarawak.