The age-old tradition dates back more than two centuries in Sabah as the state’s prime location at the northernmost point of Borneo makes it a popular site for traders.
Over the years, it has evolved into a business that is monitored by the Customs Department along with port and marine authorities and formalised through forms and a pre-ordering process, although by and large, traders still rely on good faith.
“Although no longer considered bartering in the true sense of the word, it still serves the same purposes and the local community is fully dependent on it for their livelihood,” said Universiti Malaysia Sabah (UMS) research officer Amrullah Maraining.
But this livelihood is now being threatened with a new proposal to review or ban this kind of trading due to security concerns over cross-border crime.
The barter trade today
Sabah’s consumer goods are traded on a regular basis between the neighbouring island districts of Mindanao in the Philippines and the east Kalimantan islands of Nunukan and Tarakan in Indonesia. The goods come by ferry to the ports in Tawau and Sandakan, as well as Kudat and Labuan.
Tawau is by far the largest trading port, due to its proximity to Indonesia.
Items exported by Sabah include local snacks, carbonated drinks, and most popular, tinned Milo while it imports fruits, dried seafood, household items like cooking utensils and cosmetic products.
“These are normal everyday items that the people in the region require. Those in Mindanao and Tarakan find it easier to trade with Sabah, than sending their goods to the big cities,” said Amrullah.
“The traders have to complete several forms to obtain permission before their ordered items are sent to Malaysia. This is to avoid contraband items and controlled and subsidised goods such as batik, petrol, diesel and sugar from being taken out,” he said.
According to his research, Indonesia is the bigger trading partner of the two countries, with 1,698 ships calling, trading goods valued at RM126 million in 2013, while Philippines had 262 ships with some RM8 million. Indonesia recorded the highest trade volume ever at RM395 million in 2001.
“These are just the recorded loads. Many more are traded unofficially at other transit stops which go undetected,” said Amrullah, who is part of the Sabah Strategic and Security Research centre (SASSREC).
From Indonesia, bananas come in by the ferry loads on a daily basis, filling up stores and supplying Tawau’s many popular banana fritter stalls, while their dried fish are among the most sought after items for domestic tourists in Sabah.
“Some shops in Indonesia’s islands specialise in Malaysian goods; they love our sugar, they say it is fine and white. And of course, there’s Milo. During the months leading up to Hari Raya, the demand goes up even higher and they can trade almost a RM1 million worth of products every day,” said Amrullah.
Sri Tanjung assemblyman Chan Foong Hin said that the multilateral trade plays an important role in sustaining the BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area) socio development, covering a land area of 1.54 million square kilometres and a population of some 70 million.
“The number of barter traders issued with the Seaman International Card in 2012 was a significant 18,388 with vessels involved at 1,768,” he said.
Opportunity for abuse
But the regular travelling between the outlying islands of Indonesia and Philippines and Sabah presents opportunities for cross-border activities that are not always above board.
Wan Shawaluddin Wan Hassan, senior lecturer in UMS’ international relations programme, said that while the trade on its own is part of these countries’ multilateral relationship, it is often a front for syndicates and individuals to run smuggling activities.
“The barter trade is closely linked to smuggling activities and security breaches. There is a lot of profit to be had in controlled items, so some politicians and influential people take advantage of this while terrorist groups from the Philippines take advantage of the sea lanes.
“Contraband cigarettes, a highly taxable item, move between the borders in bulk every day. Petrol and sugar are also cheaper and in high demand, but one of the biggest smuggled items is cooking gas cylinders,” he said.
Both Amrullah and Wan Shawaluddin from UMS say that corruption has become so routine that over one million gas cylinders reported missing last year were found in Pulau Sebatik, a small island 1km from Tawau, shared by Malaysia and Indonesia with a population of 8,000.
Then Eastern Sabah Security Commander Datuk Abdul Rashid Harun said that the gas cylinders were reportedly brought across the border to be taken to Indonesia and Philippines — wasting a government subsidy meant for Sabahans.
While the smuggling means a loss of potential taxable income and government funds, worst still are those who abuse the sea lanes to smuggle in firearms and drugs and to run kidnap-for-ransom (KFR) activities.
Malaysia’s Inspector General of Police Tan Sri Khalid Abu Bakar had last year proposed the ban on barter trade as a security measure following the abduction of two Malaysians from a popular seafood restaurant by armed Abu Sayyaf terrorists.
He said he would propose that both legal and illegal barter trade be stopped as many were capitalising on the situation while exchanging goods.
A stop-gap solution
However, assemblyman Chan and the academics all express doubt that a ban would stop smuggling activities or other cross-border crime.
“I think it will go some way in limiting cross-border activities and promote tighter border security, but it will still happen, just underground. It involves the community’s livelihood and they will, by hook or crook, find a way to do business.
“As it is, they are already finding loopholes in the system. They have nowhere else to send their products if we ban trade. To ensure their survival, the trading activities will go on, and the same issues will still be there,” said Wan Shawaluddin.
In fact, the ban might bring about the opposite effect as those who struggle to make a living might resort to piracy and KFR activities.
“Looking at the previous cross-border abduction cases, it appears that the main objective of the Abu Sayyaf, or any other southern Philippines’ armed groups, is basically money. For them, kidnapping-for-ransom is a lucrative business, thanks to ineffective security along our coastline from the north to east coast,” said Chan.
Border control in the east coast remains loose as the porous coastline provides ample opportunity for sleek powerboats to evade detection.
“The answer is tighter security control but then again, no amount of technology and security assets can stop intruders if the integrity of the people is compromised. The community, the guards — everyone -– must cooperate if we are to guard our borders,” said Wan Shawaluddin, adding that Esscom, in its third year of operations, is trying hard to integrate.
“It’s not an easy task as informers of the southern Philippines are embedded into the local community. The authorities have to juggle between not leaving themselves vulnerable and keeping ahead of the going-ons – it is a tough ask,” he said.
“At the same time, the local people involved in the barter trade should also take more ownership and guard their rice bowl from being abused. There is a lack of understanding on the border crossing by the people on the ground.
“To them, the border does not exist and as long as they do not deal with firearms or drugs, they feel they are not doing anything illegal and come and go as they please,” said Amrullah.
Amrullah reasons that even though the barter trade is associated with smuggling and security issues, it has also contributed immensely to the harmonisation of the border communities and a disruption to their livelihood would not go down well.
On the ground, people are oblivious to the tension between Malaysia and the Philippines as the latter is not backing down on their claim on Sabah, but a ban of this nature could severely upset the delicate balance of border peace.
“We cannot put a price on peace, and Malaysia might have to swallow the incidence of some activities in order to maintain order during this period,” said Wan Shawaluddin.
By Julia Chan
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