KUALA LUMPUR (April 10): The complementarity of Malaysia and Indonesia could be further explored in bilateral trade, despite competing in the same palm oil market, as the relationship should be strengthened akin to siblings, said Indonesian Finance Minister Sri Mulyani Indrawati.

She said Indonesia, for example, had been working rigorously to clean up many of the images, distortions, and negativity regarding palm oil management.

In an exclusive interview with Bernama on Thursday, the former chief of the World Bank stated that, given the challenging economic environment, both countries should strengthen their relationship.

Sri Mulyani acknowledged that Malaysia had more experience and is more advanced in palm oil investments, which could be beneficial for collaboration.

“Indonesia and Malaysia naturally should be closer, but sometimes, just like siblings, you have a certain rivalry, but it should not be seen as something which is hampering or creating an obstacle to cooperation.

“Malaysia and Indonesia can demonstrate that palm oil is a sustainable economic activity on a global scale. We (Indonesia) [for example] are working to coordinate this collaboration among our agencies, particularly in relation to the European market. This market often stigmatises us concerning deforestation, and our image related to palm oil’s health effects.

"Both countries should work closely and stronger, because if we work individually, the result is going to be less effective,” she said in response to a question about how Malaysia and Indonesia could enhance bilateral trade, particularly in palm oil.

The two countries are the leading global palm oil producers, with Indonesia being the largest followed by Malaysia, commanding about 80% of the market.

Apart from palm oil, Sri Mulyani said Indonesia is also looking at Malaysia's shariah-compliant finance, which has advanced infrastructure.

"We are also looking at the halal industry. So, there are a lot of things that I could think for the two countries that have lots of potential,” she said.

Total bilateral trade between Malaysia and Indonesia last year was recorded at RM116.29 billion, an increase of 4.5% from RM111.21 billion in 2023.

Indonesia is Malaysia’s sixth-largest trading partner globally, and the second largest among Asean member states. 

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