For most of the second half of the last century, the issue of Penang’s free port status was a running sore that incited strong emotions amongst the people of Penang. The recent proposal of BN Penang to restore Penang’s free port status shows that the issue has still not died in certain quarters. The issue now is how a veritable future for the port can be secured.
From its establishment as a British settlement in 1786, Penang, with its sister settlements Malacca and Singapore to the south, enjoyed the status of a free port. With no customs duties except on opium, alcohol, tobacco and eventually petroleum and motor-vehicle tires and tubes, Penang developed a flourishing international entrepôt trade serving southern Thailand, Sumatra and the North of Malaya. After the disruption of the Second World War, the islands of Penang and Singapore once again regained their free port statuses, but Province Wellesley and Malacca on the mainland were both absorbed into the customs area of the Malayan Union in 1946.
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