RI-Malaysia relations remain strong in 2003<\/p>\n
Veeramalla Anjaiah, The Jakarta Post, Jakarta<\/p>\n
The relations between Indonesia and its neighbor Malaysia
\ndisplayed a great deal of maturity and activity in 2003. The
\ndispute over Ligitan and Sipadan islands, the mass deportation of
\nillegal Indonesian workers and Malaysia's first leadership change
\nin a generation all failed to dent the strong relations between
\nthe two Muslim-majority democratic states.<\/p>\n
These issues underscored both countries' desires to nurture
\ncordial ties, while attempting to overcome the hiccups and
\nenhance bilateral relations.<\/p>\n
Thanks to the rapport between the leaders of the two countries
\nand Indonesia's acceptance of the International Court of
\nJustice's judgment on Ligitan and Sipadan islands, relations
\nremained strong throughout the year.<\/p>\n
The Hague-based International Court of Justice (ICJ) said in a
\nDecember 2002 judgment that both the disputed islands belonged to
\nMalaysia.<\/p>\n
Though the ICJ's decision was a bitter pill to swallow,
\nIndonesia -- the world's largest Muslim-majority nation and
\nSoutheast Asia's regional power -- accepted it in line with the
\nASEAN spirit despite an uproar in its House of Representatives
\nthat lasted for several months.<\/p>\n
Indonesia is the chairman of the Association of Southeast
\nAsian Nations (ASEAN).<\/p>\n
Bilateral ties became somewhat strained in late 2002 following
\nthe mass deportation of thousands of illegal Indonesian workers,
\na few of whom were even jailed and caned for resisting the
\ndeportation process.<\/p>\n
In an unprecedented move, Malaysia deported nearly half-a-
\nmillion illegal Indonesian migrants in a short space time and in
\na manner that many considered "inhuman".<\/p>\n
The Indonesian government had difficulty in coping with the
\ninflux, and housed the returnees in tents near the border. A
\nnumber of people, including women and children died due to the
\nlack of sanitation and health facilities in the camps.<\/p>\n
Demonstrating an ability to overcome its dissatisfaction in
\ndeference to Malaysia's sovereignty, Indonesia respected Kuala
\nLumpur's decision on the deportations.<\/p>\n
Thanks to Indonesia's active engagement of Malaysia, both
\ncountries -- which share a common vision of relative pluralism,
\ntolerance and equal opportunity -- have been enjoying close and
\ncordial relations since the end of the konfrontasi (1965-67) era
\nwhen the countries came to the brink of war.<\/p>\n
In the context of longstanding relations between the two
\ncountries, Malaysia's former prime minister Mahathir Mohamad said
\nin August 2003 that he did not see any hurdles in maintaining a
\nclose relationship with Indonesia.<\/p>\n
"There are no problems in our relations," said Mahathir. "We
\nfind it easy to cooperate in all fields."<\/p>\n
Malaysia's Foreign Minister Syed Hamid Albar also backed
\nMahathir's view.<\/p>\n
"Our bilateral relations are very good. We manage them very
\nwell. We know that there are differences in approaches and some
\nsensitive issues. But we know how to overcome these differences
\nand handle those sensitive issues," Hamid Albar told The Jakarta
\nPost in Malaysia's new administrative capital, Putra Jaya, last
\nyear.<\/p>\n
He was referring to the ongoing thorns in the bilateral
\nrelations, like the annual haze problem, migrant workers, illegal
\nlogging, human trafficking, terrorism and border problems.<\/p>\n
In 2003 alone, Indonesia's first female president, Megawati
\nSoekarnoputri, made three visits to Malaysia and met Mahathir
\nmore than half a dozen times in various international forums.<\/p>\n
Megawati visited Kuala Lumpur in February to attend Non-
\nAligned Movement Summit, Kuching in August for annual
\nconsultations and Kuala Lumpur again in October to attend the
\nOrganization of the Islamic Conference meet. On Mahathir's part,
\nhe attended his last ASEAN Summit in Bali, where Megawati bid
\nfarewell to one of the great leaders of ASEAN and the builder of
\nmodern Malaysia, with tears and a standing ovation.<\/p>\n
With the retirement of Mahathir on Oct. 31, the rapport
\nbetween the Indonesian and Malaysian leaders has not ended.
\nMegawati met Mahathir's successor Prime Minister Abdullah Ahmad
\nBadawi to improve bilateral cooperation on Dec. 11 in Tokyo while
\nattending the Japan-ASEAN Summit.<\/p>\n
Actually, Indonesia and Malaysia need each other. Malaysia
\nneeds Indonesian workers to help support its growing agriculture,
\nindustrial and infrastructure sectors, while Indonesia badly
\nneeds foreign investment -- a rare commodity since the financial
\ncrisis -- from countries like Malaysia in order to create new
\njobs for its millions of unemployed youth.<\/p>\n
Meanwhile, bilateral trade has been growing faster despite of
\nthe 1997 economic crisis that plunged Indonesia into turmoil.<\/p>\n
"In fact, Indonesia is our biggest trading partner in the
\nASEAN region. And our trade with Indonesia kept increasing even
\nduring the crisis period," said Malaysia's Minister of
\nInternational Trade and Industry Rafidah Aziz, who visited
\nJakarta recently.<\/p>\n
The total value of bilateral trade in 2002 was US$3.1 billion.
\nThis was an improvement on the trade value in 2001, which stood
\nat $2.8 billion. Indonesian exports to Malaysia in 2002 were
\nrecorded at $2.0 billion, accounting for around 4 percent of
\nIndonesia's total exports of $57.15 billion.<\/p>\n
Indonesia's imports from Malaysia totaled $1.04 billion in
\n2002, an increase of 3.2 percent from 2001.<\/p>\n
Jakarta expects that its exports to Malaysia will increase
\nthis year. Indonesia's exports to Malaysia during the first five
\nmonths in 2003 already reached $886.77 million, while imports
\nstood at $416.35 million during the same period.<\/p>\n
The bilateral trade balance with Malaysia has always been in
\nIndonesia's favor. For example, Indonesia enjoyed a trade surplus
\nof $992.5 million in 2002, $600 million in 2001 and $540 million
\nin 2000.<\/p>\n
On the investment side, Malaysian investors -- whose total
\ninvestments in Indonesia cumulatively amount to $10.25 billion
\nsince 1967 -- have shown a desire to buy more stakes in crisis-
\nhit Indonesia given the availability of land here for palm oil
\nplantations, and cheap assets and labor.<\/p>\n
From January to June 2003, Malaysia -- the 11th largest
\ninvestor in Indonesia -- pumped $77 million into 23 projects.<\/p>\n
Confusion and uncertainty arising from the newly introduced
\nregional autonomy laws as well as exorbitant land claims and high
\ncompensation sought by the Indonesian villagers have forced a
\nnumber of Malaysian investors to raise their eyebrows and adopt a
\ncautious stance.<\/p>\n
A few of them, however, had no intention of postponing their
\nplans, as in the case of the Palmerah oil and gas concession in
\nSouth Sumatra.<\/p>\n
Malaysian oil contractor Tately & NV won the bidding for the
\nlucrative onshore Palmerah block, outbidding Indonesia's state-
\nowned oil and gas company Pertamina.<\/p>\n
Malaysia's Commerce Asset Holding Berhad, one of the country's
\nleading financial conglomerates, also purchased a majority stake
\nin 2002 in Indonesia's Bank Niaga for Rp 1.05 trillion (US$114
\nmillion) from the Indonesian Bank Restructuring Agency.<\/p>\n
Malaysian investors also invested Rp 1 trillion ($110 million)
\nin the palm oil, cold storage and timber sectors in West
\nKalimantan. Oil and gas company Petronas is also tapping
\ninvestment opportunities in Indonesia's oil and gas sector.<\/p>\n
Not withstanding the uncertain situation in Indonesia, current
\nconditions and geo-strategic interests mean Malaysia will likely
\ninvest more in its neighbor, at least in the lucrative energy,
\ntelecommunications, mining and infrastructure sectors. This would
\nbe to the mutual advantage of both countries.<\/p>\n
On the terrorism front, both countries have been cooperating
\nwith each other by exchanging intelligence on religious militants
\nsince the Bomb blasts on Bali island in October 2002. Defense
\ncooperation between the two Southeast Asian neighbors remain
\nclose and friendly. Joint military exercises are also held
\nregularly.<\/p>\n
With a visit to Jakarta next month by new Malaysian Prime
\nMinister Badawi on the cards, officials and business leaders must
\nmake the most of the opportunities to further boost relations
\nbetween these two countries in 2004 and beyond.<\/p>",
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"sponsor": "Okusi Associates",
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