Indonesia and Malaysia together dominated global production of palm oil. Source: Wikimedia
Malaysia’s Prime Minister Najib Razak says he wants to double trade with Indonesia to US$30 billion in the next few years.
Last year, bilateral trade was valued at US$16.6 billion.
“Malaysia is Indonesia’s second best investor and we want to boost trade to reach US$30 billion in the following years,” Najib told the press at Jakarta’s State Palace.
The two countries agreed to revitalise the Joint Trade and Investment Committee (JTIC) agreement, boost business-to-business links and increase market access.
A second JTIC was held in Jakarta in June with several deals signed, including a border trade review.
Malaysia is among the five largest investors in Indonesia after Singapore, Japan, the Netherlands and the UK, with US$1.78 billion channelled into 448 projects.
The embattled premier said Kuala Lumpur wanted to increase investment in Indonesia, including in road and property development.
Jakarta’s financial regulator and the Malaysian central bank have signed an agreement that will increase the access of banks to each other’s market.
Muliaman Hadad, chairman of Indonesia Financial Services Authority (OJK), and Muhammad Ibrahim, Bank Negara Malaysia governor, signed the deal at the palace.
“The agreement is aimed at reducing an imbalance in the market access and banking activities of both countries through the presence of banks that fulfil certain conditions in each jurisdiction, based on the principle of reciprocity,” the Indonesian government said.
Malaysian banks CIMB and Maybank already have branches in Indonesia, while Indonesian state-run PT Bank Mandiri plans to expand into its smaller, more affluent neighbour.
Indonesia’s President Joko Widodo said the countries were committed to expanding the scope of protection for Indonesian migrant workers. “We underline the importance of cooperation to protect Indonesian migrant workers in Malaysia,” he said.
Najib agreed to protect Indonesian migrants and said Malaysia would collect more data about its migrant communities.
They agreed to increase cooperation in border security, including preventive measures against maritime kidnapping.
The pair also discussed cooperating to increase palm oil production. “It may need a joint research to make palm oil as a product acceptable all over the world,” the Malaysian prime minister said.