Indonesia agrees to form joint economic committee with Malaysia

Kuala Lumpur (Antara News) - The Indonesian government has agreed to a proposal by Malaysia to set up a bilateral economic commttee to handle the increasing flow of Malaysian investment funds to Indonesia.

"Malaysian Trade Minister Rafidah Aziz has proposed institutionalized meetings to be conducted in the form of a joint ministerial committee and her Indonesian counterpart Mari E Pangestu has agreed to it," Economic Attache of the Indonesian Embassy in Kuala Lumpur, Rahmat Pramono said here on Sunday.

In 2006, Malaysia was the biggest investor country in Indonesia with investment worth 2.2 billion US dollars, outperforming major investor countries so far such as Japan, South Korea and Taiwan.

Malaysia`s business expansion to Indonesia included such sectors as automotive, banking and telecommunications.

"No specific time has been fixed for a meeting to discuss further the matter. Indonesia will likely propose various agenda to be discussed such as a proposal to raise the value limit of trade allowed by both sides in the border areas, logging issues and others," he said.

Rahmat Pramono said that Indonesia would propose an increase in the value limit of trade agreed by both nations in their border areas because the trade limit set so far was now too small due to increasing flows of goods between the two nations.

He said that residents of both countries in the border areas were brothers so that the flows of human and goods were high in the boarder areas.

Besides, Indonesia is also expected to discuss logs trade as illegal logging cases are still high in the border areas, he added.

Malaysia`s timber exports have exceeded Indonesia`s timber exports to the world market, Pramono said.

"This provoked us to raise a question as to from where Malaysia gets the timber for its exports," Pramono added.

He said that Malaysia`s production forests could be exploited only in 2010.

After all, Europe is focusing its attention on Malaysian timber which is believed to hail from illegal logging in Indonesian forest, he said. (*)
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