Indonesia, Malaysia push sub-regional cooperation

Mustaqim Adamrah, THE JAKARTA POST, JAKARTA | Wed, 03/18/2009 10:33 AM

Indonesia and Malaysia are pushing private sector and regional administrations to initiate sub-regional development cooperation.

President Susilo Bambang Yudhoyono said Tuesday the two countries had pledged to work together within the sub-regional framework of the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) and the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA).

“I said in a forum (attended by IMT-GT and BIMP-EAGA members) that Sumatra was in good shape, and Sulawesi was, too, and continuing to grow. Johor and Riau also grew,” he told the press at the State Palace after a ceremony welcoming Malaysian Prime Minister Abdullah Ahmad Badawi.

Badawi was on a two-day trip attending the sixth annual consultation on sub-regional cooperation, which ended Tuesday.

“I hope that the private sector will grow and regions can dig up their own opportunities, with government’s support,” Yudhoyono said.

Yudhoyono said there were good opportunities for cross-border sub-regional economic development and cooperation including in energy, as well as in key economic sectors including agriculture, agribusiness, mining and forestry.

Late last month, Yudhoyono met with Malaysian Prime Minister Abdullah Ahmad Badawi and Thai Prime Minister Abhisit Vejjajiva in a sub-regional meeting under the fourth IMT-GT Summit.

The three heads of states pledged to connect the three countries in an effort to boost trade, investment and tourism between them.

“[The physical part of] the project will be roads, ports and airports, and will involve Indonesia’s Sumatra provinces and also a number of Thai and Malaysian areas,” he said on the sidelines of the 14th ASEAN Summit in Cha-am, Thailand.

In particular the proposed sub-regional infrastructure projects were aimed at increasing cooperation in energy to secure supply in the region, as well as food and services.

The three countries also planned to develop five “connectivity borders” linking Shonglak (Thailand) to Penang (Malaysia) to Medan (Indonesia); various routes across the Malacca Strait; Aceh-Dumai-Palembang in Indonesia; Malacca Strait-Dumai; and Ranong (Thailand) to Phuket (Thailand) to Aceh, said presidential spokesman Dino Patti Djalal in February.

These projects will be financed by the Asian Development Bank (ADB), he said, without elaborating on the financing scheme or how much the project was worth.

According to the ADB, the IMT-GT currently consists of 14 provinces in Southern Thailand; eight states in Peninsular Malaysia; and 10 provinces of Indonesia’s Sumatera island.

The BIMP-EAGA consists of Brunei Darussalam; Central Kalimantan, East and West Kalimantan, South Kalimantan, North Sulawesi, South Sulawesi, Maluku, Central Sulawesi, Southeast Sulawesi and Papua in Indonesia; Sabah and Sarawak states and the Federal Territory of Labuan in Malaysia, Island of Mindanao and Palawan Province in the Philippines.

ADB support reflects that the region has over half a billion people, has huge potential for development, with large amounts of land, abundant labor, rich natural resources and a sizeable internal market.

The IMT-GT, a sub-regional cooperation program launched in 1993, is aimed at accelerating the sub -region’s economic transformation through measures like promoting tourism and lowering transportation and transaction costs.

The BIMP-EAGA initiative was launched in 1994, aimed at hastening the development of the economy of Brunei and the subregions of the three other partner countries through regional cooperation.

Total bilateral trade between the sub-regional partners stood at US$11.5 billion in 2007, with $6.74 billion in non-oil and gas, while total bilateral trade reached $14.62 billion in the January-November period in 2008, including $9.27 billion on non-oil and gas, according to Trade Ministry.