Malaysia, Indonesia lower trade target
REALISTIC GOAL: Countries to work towards US$25b by 2020
MALAYSIA and Indonesia will now work towards achieving US$25 billion (RM104.5 billion) bilateral trade target by 2020, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.
The US$30 billion target by both governments last month will not be feasible as it projects a 20 per cent bilateral trade growth annually.
“We have to be realistic that under the current global economic environment and weaker global trade scenario, that (20 per cent) would be difficult to achieve,” he said, after chairing the Malaysia-Indonesia bilateral meeting with his counterpart Enggartiasto Lukito.
Earlier, Lukito’s discussion with Prime Minister Datuk Seri Najib Razak centred on difficulties for Malaysian halal products to enter Indonesia and the recently set up Council of Palm Oil Producing Countries Secretariat.
Last year, Malaysia’s total trade with Indonesia rose by one per cent to RM60.2 billion, underpinned by exports to Indonesia, which consisted largely of petroleum products, chemical products, machinery and parts as well as electrical and electronics.
By the end of last year, 98 manufacturing projects, mostly in food manufacturing, chemical and chemical products and basis metal products valued at US$588.6 million, had been implemented.
Notable names are Musim Mastika Oils & Fats, Rajawali Group, Eco Tower, Sinar Mas group, Vance Bioenergy and Sido Bangun.
Malaysian firms have been making regional footprints in Indonesia in construction, food manufacturing, plantation and banking.
With total realised investments of US$3.1 billion, Malaysia is the second largest foreign investor in Indonesia after Singapore, led by Sime Darby (PT Minamas), TDM (PT Rafi Kamajaya Abad), Kuala Lumpur Kepong Bhd (PT Langkat Nusantara Kepong) and Scomi Oilfield Services (PTOMS Oilfield).
In financial services, Malaysian investors include Takaful Malaysia (PT Syarikat Takaful Indonesia), CIMB Group (CIMB Niaga) and Maybank Group (Bank Maybank Indonesia).
On boosting Indonesian investments in Malaysia, Mustapa said there had been growing interest and there was no need for additional incentives and facilitation.
Musim Mas is big in Johor and is expanding its operations here, with hotels including St Regis and interest in Iskandar Malaysia.
Indonesia, he added, was a big market for Malaysian services in terms of education and medical tourism. “There has been some exciting developments in infrastructure, attracting foreign direct investments, loosening up controls and improving efficiency, which have been put in place by President Joko Widodo’s administration — making it more attractive for Malaysian firms.