Sabah’s External Trade: The Economic Impact of Direct Investment and the Strategic Role & Features of an Ideal Port Transhipment Hub

Abstract

Seaport is an important gateway for the international and domestic movement of goods for a country. International trade via sea contributes significantly to global trade. Maritime nation like Malaysia and state like Sabah are not exception. Due to its strategic location and other factors Malaysia is listed in the top 5 economies in the Liner Shipping Connectivity Index, according to Review of Maritime Transport 2024. Most merchandise trading activities between Malaysia and foreign countries are via sea channel. In the context of Sabah, the volume of trade are reported to exceed RM100 billion. In terms of trade openness, the volume of trade is greater than the state GDP. In Sabah, there are several sea ports that support trading activities in the eastern and western part of the state. They play important role in accommodating the need to export and import products within Malaysia and with the rest of the world. Moving forward, to increase Sabah’s volume of trade, it is imperative that the strategic role and facilities to be improved overtime. In addition, the role of direct investment is crucial. This study attempts to study and highlight the strategic role and features of an ideal port transhipment hub around the world. Inputs from various stakeholders are being gathered to support recommendations proposed for future ports or present port expansion.