Experts Say Indonesia-Malaysia Trade Potential Still Promising

TheIndonesia.id - A study on economic and trade relations between Indonesia and Malaysia concluded that bilateral trade between the neighboring countries remains a very a promising sector and still has great potential.

During a discussion on Thursday, March 17, senior analyst from Penang Institute Lee Siu Ming said the comparative advantage of Indonesian products and positive acceptance from public in Malaysia of Indonesia products are among the factors that contribute to the relatively healthy bilateral trade relations.

His report "Selected Indonesian Products in Penang and Malaysia Markets: A Comparative Advantage Analysis" also discussed market size of Indonesia-Malaysia trade relations, consumer behavior trend in Penang and Malaysia, comparative advantages and export potential of Indonesian products in Malaysia, supply chain, and export promotion in Penang and Malaysia.

The research is a collaborative work between Penang Institute and Indonesian Consulate General (KJRI) in Penang. Executive director at Penang Institute Ooi Kee Beng said the research is expected to further encourage bilateral cooperation, not only in trade, but also in socio-culture, considering the similarities between the two countries.

Sub-regional Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) and regional ASEAN cooperation schemes are also seen as significant driving factors to the growth of Indonesia-Penang trade.

“Especially considering collaboration between Medan and Penang as twin city,” Ooi Kee Beng said.

Consul general at KJRI Penang Bambang Suharto explained that the study focused on comparative advantages of selected fast moving consumer goods (FMCG), textile, and footwear products from Indonesia for Malaysian market, particularly Penang.

“The objective of this research is to look at market opportunities by focusing on the current situation of Malaysian market, especially Penang, on certain Indonesia’s exports,” Suharto said.

This research is also expected to be the reference for future export policies and regulations, so Indonesian exporters can formulate the right strategies to enter the Malaysian market.

Penang is particularly seen as a good market for Indonesian products, considering its foreign trade. With its port development, the region can also become the next trade hub in the region.

Furthermore, the socio-cultural similarities also help trade relations between Penang and Indonesia, especially in Sumatra.

And the plan to change COVID-19 status to endemic that will be adopted by both Malaysia and Singapore in the coming future also opens a door to recovering economic activities and situation, as restrictions are gradually lifted.

Director for Southeast Asian affairs at the Ministry of Foreign Affairs Mirza Nurhidayat said the Indonesian government will welcome any diplomatic efforts that can benefit the trade and export activities.

“Penang offers export opportunity, and it’s a challenge for Indonesia exporters to answer,” Nurhidayat said.