Free trade zone at Sabah-Indonesia border mooted

KOTA KINABALU: A free trade zone at the Sabah-Indonesia border will possibly help reduce smuggling activities and at the same time bring about business opportunities for both sides, said a chamber of commerce leader.

The free trade zone will be beneficial since Kalimantan Utara (Kal­tara) has what Sabah needs, and people living in Indonesia’s 34th province require what Sabah can provide, said Kilit Laing, chairman of North Kalimantan Chamber of Commerce and Industry.

Laing said Kaltara, with a population of more than 20 million, has huge areas of land suitable for padi and oil palm plantations, while the other sectors that could be explored are hydropower, timber products and mining, apart from oil and gas.

“People in Kaltara want food items like rice, sugar, milk, coffee, cooking oil and other basic necessities including fuel, cooking gas, as well as construction materials,” he added.

A regularised trade could see a reduction in smuggling activities too, said Laing who is here at the invitation of Society Empowerment and Economic Development of Sa­bah (Seeds) chairman Datuk Ba­­dil Zaman Fazul Rahman.

Smuggling activities, especially in Sabah’s east coast are rampant, more so after barter trade was suspended on April 1 last year following a series of kidnappings.

Laing said it was easier for them to trade with Sabah, and even Sarawak to some extent.

He said Indonesian have already pledged 1,000 acres (404.6ha) of land at Simanggaris for the free trade zone proposal.

Simanggaris is the border town that is minutes away from Serudong on the Malaysian side.

Laing said there was a good road from Simanggaris to the other towns in Kaltara.

Badil said the free trade zone was an idea that needed further study, but “existing models that we can build from include the Bukit Kayu Hitam or Pengkalan Kubor in Pe­­ninsular Malaysia”.

A Memorandum of Understanding between Seeds and Kadin is expected to be signed in Tanjung Selor next month to formalise a framework of cooperation on trade-rela­ted programmes.