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Submitted by Smita on

Malaysia’s open macroeconomy and increasing integration into global supply chains mean that transportation and freight logistics in general, and maritime ports in particular, are essential to enabling economic growth and attaining high-income status. Since imports and exports of manufactured goods, as well as bulk materials like crude oil, petroleum products, and palm oil, depend on international connectivity and efficient inland transportation, pursuing an open-economy model has impacted maritime ports in that these have been modernized by engaging specialized private sector marine terminal operators to operate these ports under long-term concessions subject to government regulation, consistent with international best practice. Moreover, increasing attention has been paid in making sure that these ports are well connected to their hinterlands through investments in highway and rail capacity expansion. Implications of investment in ports include better international connectivity, lower logistics costs, and higher economic competitiveness, which in turn attract foreign and domestic investment, generate jobs, and contribute to Malaysia’s well-being. Malaysia’s privileged geographic position at the heart of Southeast Asia and very close to the main East-West trade lanes has also positioned the country as a major maritime hub for transshipment cargo – meaning that Malaysia’s ports benefit other countries in the region by providing them with international connectivity through ports like Port Klang and Port of Tanjung Pelepas. While transshipment activity is not directly connected to Malaysia’s own imports and exports, it nevertheless generates significant economic spillovers in the form of jobs at the ports and associated supporting services, and, importantly, in the form of expanded maritime connectivity with the rest of the world by virtue of operating as a hub – which ultimately benefits Malaysian importers and exporters. Maritime ports are critical assets to Malaysia that should continue to benefit from private and public investment for years to come.