Reshaping Asean’s economic future

Emerald Belt of Borneo Strategy, seeks to deepen economic partnerships among all Asean member states. — Reuters

PETALING JAYA: The Emerald Belt of Borneo Strategy, a collaborative effort between Malaysia and Indonesia, seeks to deepen economic partnerships among all Asean member states.

According to Malaysia-Indonesia Business Council international affairs director Senator Jaziri Alkaf Abdilah Suffian, several approaches have been adopted to integrate trilateral economic cooperation between Malaysia, Indonesia and Brunei.

The Emerald Belt of Borneo Strategy also seeks to expand its “enormous benefits” to other countries like the Philippines and Thailand, he said.

Jaziri pointed out that the strategy has contributed to strong investments in recent years.

Between 2017 and 2022, Malaysia invested a total of US$10.1bil in Indonesia, solidifying its position as Indonesia’s seventh largest foreign investor.

The 2022 figures show a substantial increase, with Malaysia’s investment in Indonesia rising to US$3.3bil from US$1.4bil in 2021, he said in a statement.

Key Malaysian investments span a wide range of sectors including transportation, telecommunications, chemical and pharmaceutical industries, food production as well as paper and printing industries.

The collaboration extends to enhancing the agricultural sector through the adoption of advanced agricultural technologies, which aim to improve food security.

Jaziri said one of the primary pillars of the Emerald Belt of Borneo Strategy is the focus on green trade and investments and development.

He said Indonesia is already Malaysia’s sixth largest trading partner and the second largest among Asean member states, highlighting the significant economic ties between these two neighbouring countries.

“This strategy promotes innovative approaches to cross-border trade such as the Border Trade Agreement and Border Crossing Agreement.

“These agreements aim to foster inclusive growth, expand trade routes and enhance supply and value chains within the Indonesia-Malaysia-Thailand Growth Triangle trade and investment framework.

“The Special Economic Zones, meanwhile, serve as key enablers to facilitate bilateral trade and human capital development through capacity-building programmes,” he said.

Under the strategy, mutual cross-border investments encompass various sectors including healthcare, pharmaceuticals, aerospace, palm oil processing, defence, electronics, automotive, waste management, smart-city technology, utilities and renewable energy.

Jaziri noted that both Malaysia and Indonesia, as major palm oil producers, could expedite the signing of a memorandum of understanding on Palm Oil Cooperation to empower local stakeholders within the global palm oil supply chain and meet global regulations effectively.

“Effectively, the strategy places emphasis on other priority sectors such as industrial downstream and sustainable renewable energy.

“Indonesia’s plans to develop downstream industries for 21 commodities across eight priority sectors offer ample opportunities for collaborations which will contribute towards economic growth and sustainability,” he added.

The strategy would also advance trilateral cooperation to enhance the halal product ecosystem in Malaysia and Indonesia, which are two of the only three Organisation of Islamic Cooperation countries listed among the top 20 halal export countries, alongside Turkiye.

Meanwhile, Jaziri said the Emerald Belt of Borneo Strategy also emphasises on sustainable development and the sharing of expertise through the exploration of investments and co-investments in East Kalimantan.

For instance, Sarawak Energy Bhd’s involvement in developing Indonesia’s largest hydroelectric power station highlights the tangible benefits of this collaboration.

“The establishment of a connection hub between Sabah and Nusantara serves as another gateway to enhance trade relations between Malaysia and Indonesia.

“This strategic move facilitates business communities and entrepreneurs in actively seeking opportunities for trade across various sectors.

“This strategy doesn’t just stop at economic and trade aspects but also accounts for critical concerns like water security,” he said.

Enhancing transboundary water cooperation through the Global Water Partnership South-East Asia aligns with Sustainable Development Goal 6 (Clean Water and Sanitation for All) is a proactive response to the impending global water crisis, he added.