Malaysian group asks RI to review oil palm policy
Malaysian group asks RI to review oil palm policy
LHOKSEUMAWE, Aceh (JP): A Malaysian businessman has asked
Indonesia to review its decision on freezing foreign investment
in oil palm plantations.
Malaysia's Chamber of Commerce's cochairman, Abdul Rahman
Maidin, said yesterday that he had asked for a review of the
policy during the Indonesia-Malaysia-Thailand Growth Triangle's
(IMT-GT) Senior Official Meeting which ended Wednesday.
Maidin told reporters he had also requested special treatment
for foreign investors, particularly from Malaysia, who had made
investments in the oil palm sector in Indonesia in the last
couple of years.
"If possible (the Indonesian government) might consider not
applying the policy in the IMT-GT," he said.
The government announced earlier this month that it had
decided to ban further foreign investments for oil palm
plantations because there were enough foreign investors in the
sector, according to State Minister of Investment Sanyoto
Sastrowardoyo.
About 80 percent, or 1.6 million hectares, of the total area
of oil palm plantations involving foreign investors is owned by
joint ventures involving Malaysian investors. Malaysia is
currently the world's largest oil palm grower, with Indonesia in
second place.
But several observers suspect the ban is aimed at protecting
local oil palm plantations and downstream palm oil business --
currently dominated by tycoons Eka Tjipta Widjaya and Liem Sioe
Liong.
"The policy is aimed at making Indonesia the biggest oil palm
producer in the world. If the Malaysians come with their skills
and marketing expertise, it is most unlikely this target can be
achieved," said one analyst, a meeting participant.
Kosim Gandataruna, the head of the Indonesian delegation at
the IMT-GT meeting, said the policy was expected to avoid an
oversupply of palm oil.
"The ban on foreign investments ... is because we have had bad
experience in managing cloves. An oversupply of cloves slashed
prices to levels which hurt farmers. We don't want that to happen
to oil palms," he said.
Most oil plantations in Indonesia are owned, established and
managed by large businesses. Farmers, who are involved in the
plantations are usually workers paid on a daily basis.
Local economists mostly expressed concern over the ban, saying
it was not only counterproductive but also went against
Indonesia's commitment to following the world's free trade
trends.
Minister of Agriculture Sjarifudin Baharsjah denied on
Wednesday allegations that the government was assisting a large
business group to monopolize the oil palm business by freezing
new foreign investment in the sector. (pwn)