- 2 days ago
An insightful discussion on strengthening Malaysia–Indonesia bilateral economic cooperation, highlighting shared growth areas, strategic partnerships, and opportunities to enhance regional economic integration with Minister Counsellor for Economic Affairs, Embassy of Indonesia in Kuala Lumpur, Hendra Iskandar.
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00:07Thanks for joining us. My name is Ibrahim Sani. This is The Economy.
00:11As we try to explore regional growth, we're trying to understand a little bit better in terms of the key
00:16markets that actually grow along with Malaysia.
00:19One such market is of course Indonesia joining me. In the studio is of course Pak Hendry Skanda,
00:24the Minister-Counselor of Economic Affairs at the Embassy of Indonesia in Kuala Lumpur.
00:30What's up, Pak? Thank you very much for coming over and sharing with us some of your thoughts.
00:34Maybe we can start off with the background of our two economies, some of the trade potentials and unrealized markets.
00:43How do you see the trade relations or the bilateral relations between Indonesia and Malaysia?
00:48Yeah. Good morning, Pak Ibrahim. First of all, I would like to thank you for bringing me here.
00:54It's a very interesting topic. Since 1957, the two countries knowing the potentials, everything shared in commons,
01:10the culture, the tradition, everything have the committed to grow together by having the tight cooperation between the two countries
01:24in particularly in the economic field.
01:28So it has been reflected as well. If we go back to the July last year, during the annual consultation,
01:40a forum where the two leaders,
01:43President Prabowo and Prime Minister Anwar Ibrahim were there and exchanging the discussion how to strengthen the bilateral relations,
01:56especially in economic between Indonesia and Malaysia.
01:59So this is the basic, the modality that the two countries will grow very fast and focus on the each
02:13potential in the field of economic that we can build.
02:17I think there's also the follow-up from the ASEAN Summit and the items that were discussed including improving our
02:30plantation businesses,
02:33including our commodities businesses. Do you feel that that is an area of growth that both countries can also deep
02:43dive as well in terms of commodities and plantations?
02:45Yes, what has been mentioned by Prime Minister Anwar Ibrahim during the summit, that the intra-ASEAN trade, which is
02:55now still low, 20%, should be boosted.
03:01Because this is the aim of the establishment of ASEAN. And the cooperation between Indonesia and Malaysia will be seen
03:12as the role model
03:13that can contribute to the largest economic of ASEAN. Again, I mentioned during the joint consultation in July 2025, the
03:24two leaders committed to extend the field of economic cooperation,
03:32that include the crops, the food security, the energy, etc. So this is very related to what it has been
03:42mentioned and it has been decided during the ASEAN Summit.
03:47And a few weeks ago, President Donald Trump invited President Prabowo to the US and in Washington, they signed a
03:54trade deal with a 19% tariff.
03:58While we acknowledge that intra-ASEAN trade needs to be boosted, we also have to acknowledge our largest trading partners
04:05globally, which is of course China and the US.
04:10Do you feel that there could be room to grow in terms of how we negotiate and try to strike
04:16a better deal with countries like the US right now?
04:20If we have a stronger voice or a joint voice together between Malaysia and Indonesia, talking to partners like the
04:25US or China and the like?
04:27Or do you feel that there is a more long-term issue and perhaps the more pertinent issue is to
04:34talk about ASEAN right now?
04:36Definitely. You know, the tariff is just one-sided cooperation, bilaterally, between Indonesia and the US, between Malaysia and the
04:48US.
04:48So it will give the benefit as well to the larger group in the regional, not only ASEAN, but if
04:56we are also talking about the APEC.
04:58So this is, I think, how we can combine and balance the potentials between the bilateral, the regional within ASEAN,
05:08or larger regional within APEC,
05:11and also how we are facing or how we deal, bilaterally, with the US.
05:18Let's talk about investments. Right now, private money is actually coming into this region.
05:24We're not just looking at the big players from, say, China or Norges Bank in Norway and the like.
05:31We're also looking at medium-sized investors trying to come in and try to set up shop booth in Indonesia
05:36and Malaysia.
05:36What are some of the biggest obstacles you think that needs to be overcome by both our countries in order
05:42for us to attract better investors?
05:44In fact, you know, I'm very pleased to see that, you know, in 2025, now Malaysia is the rank of
05:53number four of investors in Indonesia
05:56with the investment of total $4.5 billion compared to the previous year.
06:04So it means that the commitment of Malaysia to have Indonesia as a partner for investment is there.
06:14And Indonesia now becomes the third biggest destination for investment for Malaysia after Singapore and Cayman Island.
06:25So this is the reflection of how we do the cooperation in a very good manner.
06:35After 2023, we have signed the MOU on the investment cooperation.
06:42So this is the result.
06:44And I was so happy to mention that Indonesia now is also starting to have the outbound investment, especially in
06:53oil and gas.
06:54So Indonesia is coming as well to Malaysia.
06:57So this is the how we feel each other, how we see the potential.
07:03So this is what we see about the growing of the cooperation in the field of investment between Indonesia and
07:12Malaysia.
07:12Large industries like oil and gas and plantation, there's always a structured way of growing these kind of industries.
07:20However, middle-sized businesses, especially small businesses, remains to be, I guess, an unstructured way of growing them.
07:30Do you feel that there's an untapped potential in terms of growing the medium-sized enterprises from Malaysia into Indonesia
07:43Is this an area that you're actually looking at?
07:46Yes, indeed.
07:47Because, you know, we don't always see on the big investors or big investment.
07:54Look at the creative economy.
07:57Creative economy consists of 17 subsectors of cooperation in the field of economic.
08:04That includes movie, song, culinary, tourism.
08:09Normally, they are conducted by the SMEs.
08:14So this is the era.
08:16This is the place.
08:17How we can boost the trade.
08:19How we can boost the investment through the economic creative in Bahasa Indonesia or creative economy.
08:28This is, you know, that the creative economy should contribute at least,
08:3330% of our national trade.
08:37Just to secure the safety of the national economic.
08:43So this is what we are doing.
08:45Take a look at the example.
08:47Now, some of the Malaysian business people in the field of culinary,
08:53they come to Jakarta and invest in some restaurant,
08:58the Pantai Indah Kapuk too.
09:02And some Indonesian restaurants also come here,
09:05invest something in the field of automotive,
09:09in the field of a restaurant.
09:12So this is what we are seeing now.
09:15We want to enlarge.
09:17So, like your Prime Minister mentioned during the Forum Ekonomi Malaysia,
09:27His Excellency mentioned that every single of citizen should feel and should gain the result of the cooperation that we
09:39make.
09:39So this is, I think, when we go to the SMEs,
09:43so every individual should be part of it and should get the positive gain of the growth.
09:50Speaking about the Forum Ekonomi Malaysia,
09:52Malaysia's economic minister, Yang Bahumat Akmal Naseh,
09:58also argued that perhaps there's a long-term view on how we should approach our economies.
10:06One item that he wanted us to start talking is, of course, mobility of our citizens.
10:13I'm not too sure what he meant by that, but perhaps if we were to put our imaginative hats,
10:19maybe free movement or mobility like the way we see it in the EU.
10:24That could be what ASEAN should be looking at sometime down the road.
10:29Do you see any merit in us talking about freedom of movement, ease of movement, labour movement?
10:35Do you think that that would be an opportunity for us to explore if we were to truly embrace
10:43closer economic ties, greater economic growth?
10:47And do you feel that that kind of item, which is mobility amongst ASEAN members,
10:52is something that we should all espouse to?
10:55Maybe not launch it today, but you know, something that we need to talk about.
10:59Of course, it's related. Mobility or connectivity, it's a part of the economic development.
11:07Now we are on the process of having the deliverable of Dumai, Melaka, Roro.
11:21It has been there under the framework of the cooperation under the IMDGT, Indonesia, Malaysia, Thailand Growth Triangle.
11:30So it's a part of connectivity to connect Indonesia, Malaysia, and Thailand in a small scope.
11:37And then in the larger one, of course, if we have this connection, the movement or the mobility of the
11:42people of ASEAN is much easier.
11:45So, because you know, in the economic sector, we are not talking only about the trade or investment,
11:52but the services, the services is there.
11:55Maybe now the physical border is still there, you know, unlike the EU.
12:01But if you see, when you see the every embassy of ASEAN countries,
12:08why do you think we have to put two flags, our flag and the ASEAN flag?
12:13It's not just raising the ASEAN flag.
12:17It is symbolizing that when you see the ASEAN flag in every or in each embassy of one country,
12:30you can come if you need assistance, if you need help.
12:34For example, in country X, there is no Malaysian embassy.
12:38But you can see, oh, there's an Indonesian embassy with the Indonesian flag and the ASEAN flag.
12:44You may come and ask for the assistance, and we are going to give.
12:47So, this is a part of the...
12:50The sense of belonging.
12:52The starting of the mobility.
12:53Yeah.
12:54The starting of connectivity.
12:56So, we have to see in the large scale.
13:01Now, we are going to have the physical mobility or physical connectivity by having the air transport or sea transport
13:10or road transport.
13:11Yeah.
13:13And do you feel that this is just going to be expounded and grow even further?
13:18The closer interconnectivity following the ASEAN summit, following the way the governments,
13:24all ASEAN governments are now working closely together?
13:25I mean, of course, there's hiccups and stuff like that.
13:28But generally speaking, I think ASEAN has enjoyed a period of growth that we haven't,
13:32of peace especially, that we haven't seen in quite some time.
13:37What would be some of the worry that you have that we have to be concerned about,
13:43or at least maybe be worried about in order for us to achieve the growth that we tend to get?
13:52Do you feel that geopolitics, global geopolitics is an issue?
13:56Do you think that inflation or inflationary risk is an issue?
14:00What keeps you up at night?
14:01Yes.
14:02The regional economic, the regional instability, the geopolitical is there.
14:09There are, the economic, but look again, during the summit,
14:15Malaysian Cumminship again stressing the continuation of the need of having the ASEAN centrality.
14:23ASEAN economic, centrality by 2030 and ASEAN community by 2045.
14:35As long as this goal are on the path and we are safeguarding it, we are following it, we are
14:47escorting it.
14:48So I think the aim of the ASEAN centrality will be there regardless what happened to the, I guess global
14:59players.
15:00Other worlds, yeah. Because you know, I have to say that in the field of oil and gas sector, when
15:07we were talking with some big players, some big investors,
15:12they admit that Asia, especially the Southeast Asia, still the potential one, safe, can be trusted.
15:24So why not? So this kind of atmosphere, we have to keep it. And of course, under the ASEAN spirit.
15:38So it means we have also to give, to continue the awareness to the people.
15:44So ASEAN is not only for the government, but for the people. They have to know, they have to feel
15:50as a part of ASEAN.
15:51They have to feel as a part of the ASEAN centrality. This is what we have to do.
16:00Domestically, many ASEAN countries are at different starting positions.
16:04And I guess for a regional block like ASEAN, it is common. We think of the EU of what it
16:11is today, but when the EU first started off in the 50s,
16:15it was much like ASEAN, when some countries are very advanced, some countries are way behind, economic growth is different
16:22and so on.
16:23But eventually, after a few decades, it all equalized. Do you see that as an issue that many of our
16:31ASEAN members need to just help each other
16:37in terms of trying to equalize our economic standing in order for us to achieve that regional growth together?
16:43And especially between Malaysia and Indonesia, do you feel that there is a common, because of our commonality in terms
16:50of our cultures,
16:51do you feel that there is a great room to grow in terms of equalizing our two economies?
16:57Of course, you know, if you remember in 2023, when Indonesia was the chairmanship of the ASEAN,
17:05we gave the slogan of the epicentrum of growth. ASEAN as the epicentrum of growth.
17:12I think this is what we would like to build. And no one should be left behind. It means no
17:21single country.
17:23And now we have our new brother and sister from Timor-Leste joining. So what capacity that we can bring?
17:31What technical cooperation that we can offer? What kind of assistance that we can help to our brothers and sisters?
17:38Because in ASEAN, now the 11 member countries should depend on each other and should complement each other instead of
17:49competing.
17:49So this is why since 1993, ASEAN established a smaller regional grouping under ASEAN, IMTGT.
17:58And then on the Instant Pipe, we have the Bimiaga. Just to give in a smaller scope, we can do,
18:05and then bring it to the larger scope of ASEAN.
18:09Let's change tax and now talk about the global supply chain. As many markets and economies are trying to shift
18:15away from the US, perhaps even move to China.
18:19Where do you see Malaysia and Indonesia in the near term position ourselves as a combined ASEAN manufacturing and perhaps
18:27even a logistic powerhouse?
18:29Do you feel that that is an opportunity of growth between our two countries in this area of combined manufacturing
18:34and logistic growth?
18:35This is the challenge. I have been visited so many times to Penang.
18:41You know, Malaysia is number one country in ASEAN who is taking the lead for the semiconductor.
18:49But I also see that when I met some business people from Penang, they also said that now Penang is
18:57already packed.
18:59So we want to have in another place to invest, especially in Indonesia.
19:06Because most of the workers also in Penang are coming from Indonesia, from Sumatra Utara.
19:12So they want to continue. So this is the model that we are going to offer.
19:18Not like, okay, Malaysia is building the semiconductor. And then again, we are also doing, this is not the spirit.
19:25So we are offering, we are offering, okay, we have some special economic zone in Jawa Tengah, in Sumatra Utara,
19:34or in other places.
19:35So we can develop it together. Last three weeks, we met from Selangor Investment.
19:46So they also mentioned, okay, why don't we cooperate in the field of semiconductor, starting from the IC design.
19:53So this is the real deliverables that we would like to see. This is our aim of cooperation.
20:01Not just, okay, Malaysia start already the building of semiconductor. Okay, we can also do it.
20:07Thailand also can do it. Singapore also can do it. So this is not the idea.
20:13Do you think that there is a possibility in the near term to actually scale it, not just execute it,
20:18but scale it and do it at a larger size, I suppose?
20:22Yeah, yeah, we can, we can do it. So at the end, it will be, you know, like, like, like
20:28how we subcontract.
20:31One product, the small other product coming from Malaysia. The other one, this one, from Indonesia. The other from, from,
20:37from Singapore, maybe.
20:38This reminds me of how the airbus is built. You know, the wing comes from Wales, the fuselage comes from
20:46France, the engine comes from Germany and so on.
20:48And then it's all assembled somewhere. The level of coordination, of course, is, it has to be there.
20:55Yeah. But it is possible if, if we have freedom of movement, if we have a common market and so
21:02on.
21:02Exactly. And, and, and the thing about this is when I share this idea with some of my friends, they
21:08look at things as is today and they say, oh no, it's impossible.
21:11It's hard to do and so on. But of course, what I tend to remind them is that if we
21:17don't talk about the possibility, then it's not going to happen.
21:20Uh, and the best part is that we've seen it done in the EU. And of course, the EU isn't
21:25perfect. We acknowledge that.
21:27But because it's been done elsewhere, I don't think it's, it's, it's so much of an imagination. We just have
21:33to work towards that idea.
21:36Um, the psychology of our people perhaps is going to be quite interesting to navigate.
21:40Do you feel that our people needs to be, I don't know how to use the word, but perhaps better
21:46inspired or, or better impressed by some of our industry leaders and some of our national leaders?
21:54How do you get our youth to actually embrace this kind of idea of a unified market for the betterment
22:02of, of, of all our constituencies and for the betterment of our two countries?
22:05Yeah. Uh, the potential is there again. Then in Indonesia, we have the Indonesian Chamber of Commerce. And on the
22:17second layer is Indonesia youth Chamber of Commerce and Industry.
22:21Oh, I didn't know that they existed. Yes. Because you know, uh, we have to continue this one to the
22:27other generation. The youth have to see what is going on. The youth normally, especially the, the, the new generation,
22:37they have another way in seeing the potential or the problem in this area.
22:44That's why the uniqueness of the Indonesia Malaysian relations are there. Maybe the formal, uh, cooperation started after having the
22:58diplomatic ties in 1957.
22:59Um, but traditionally, um, but traditionally when you go to, uh, uh, Riau, Johor, Kalimantan, you see, maybe it's, it
23:09has been thousand years that they are, they have been doing the trade relations, the exchanging.
23:16This is the uniqueness of Indonesia Malaysia cooperation in all fields, in all fields. There is no in the, in
23:26the world that the border is very long. And then there are so many so common.
23:33We speak the same language. We, we, we eat the same food. Yeah.
23:38That's why we like each other's food better, I suppose. Um, uh, talent is a key feature here. None of
23:45this is going to happen without talent development.
23:47And, um, we have the highly specialized talents. You were talking about semiconductor, IC design, chip design. That is very,
23:53very critical.
23:54And, uh, as much as we like to say that we are big in, uh, E&E, Malaysia is still
24:00lacking in terms of IC, chip designer. Maybe chip fabricators, we have a lot.
24:04So that's an area of, of focus. What about Indonesia? What would be some of the talent, uh, growth areas
24:11that you, you feel that needs to be shored up in order for us to achieve these kind of goals?
24:15Yeah. Uh, now we are sending, you know, our, our, our young generations to have study abroad just to, to
24:25keep the knowledge.
24:27Because, you know, uh, we realize that by having the cooperation, we have to develop the, uh, human resources.
24:37Among us also, you can see that Indonesia is the second largest, uh, students, international students in Malaysia.
24:45So, they are doing it, and they're ready. After they come back, they're ready to develop.
24:50Whether in Indonesia, or they're, they're going to have the collaboration with other countries that include Malaysia.
24:56So, the, the, the, the, uh, human resources is the most important thing.
25:01Because we have also, we are going to achieve the Indonesian golden era, Indonesia must, in 2045.
25:09That's not far. It's really not far.
25:11It's on the same year with the, uh, ASEAN, uh, community that is going to be achieved in the 2045.
25:21So, let's do it together.
25:23Final area of concern that I want to explore with you is, of course, um, future industries.
25:28Um, including, say for instance, green mobility, um, EV, um, perhaps even, um, halal industry.
25:36Do you feel that these kind of areas, uh, have that kind of potential?
25:41Especially when it comes to trying to develop these kind of industries collectively together?
25:46Um, say for instance, with EV, um, there's a lot of natural resources in Indonesia.
25:50Um, we can, um, perhaps even scale up our, uh, supply chain and perhaps our, um, um, value add, uh,
25:58to collaborate better there.
26:00Uh, halal industry, of course, our consumer segment collectively is close to 300 million people.
26:05That could be, uh, some, some avenue there.
26:08And halal industry is not just about food.
26:10It can be cosmetics.
26:11It can be, uh, apparel and the like.
26:13So there's a lot of these, um, I guess, green areas where, where we have yet to be explored.
26:20What excites you in terms of the potential industries that we can grow further?
26:25We are developing, we are developing, you know, by collaboration between energy in Malaysia on the EV.
26:32Hmm.
26:33And then, you have started.
26:35And we, we have the raw materials, you know, the rare earth and the critical, critical minerals that an EV
26:42needs.
26:43Hmm.
26:43So this is, again, the collaboration should be there.
26:48We cannot, we cannot be by ourselves.
26:51And Malaysia or other countries also can.
26:53So we have to do it by collaborating this one.
26:58Um, and then the second is the halal.
27:01So halal, we can talk also not only halal on the food, but also on the finance.
27:07Now, everything is halal.
27:09We have signed the, uh, standardization that both countries already acknowledged the standardization of halal.
27:18We know that, uh, that, that, that, that Malaysian halal certificate is widely accepted in the world, especially in Europe.
27:26So, how can we collaborate?
27:28So, we have to do the joint collaboration.
27:32So, this is the challenges that we have to fill.
27:35We have to know that this is not the end.
27:38This is not the competition.
27:39This is the, the, the era of having the collaboration.
27:43That's why, you know, every time I meet, uh, Jakim, or, or, or, uh, in Indonesia BPJ, BPJPH, I always
27:51said, come, sit together.
27:55See what is the obstacle, and then forget it.
27:58The most important thing, what is the potential?
28:00Yeah.
28:01Yeah.
28:02Because, you know, uh, Malaysia also needs, uh, the cooperation in the, not also in halal, but in the food
28:08security.
28:09We have a lot of them.
28:10Yeah, yeah, yeah.
28:10So, this is what also the, uh, embassy here is trying to link, you know, the cooperation.
28:17I think two or three companies already started.
28:21So, we have to continue.
28:22What about the poultry?
28:24The chicken?
28:25Yeah.
28:26Why don't we have the, I know, the, uh, Malaysia has a very high standard of, uh, chicken.
28:31We have a lot of chicken, but Malaysia has a very high standard of chicken by consistent, uh, consistent with
28:39the GPS, the grand pattern stock.
28:41Oh, that's right.
28:42So, we can, there is still scope to collaborate.
28:46So, I've, I've, I've, I've spoken with the, uh, Ministry of Pertanian here already, with, uh, Kementerian Luar Negeri as
28:54well, and Indonesia also.
28:55So, you will see.
28:56You know, in the, in the very near future, the cooperation will be there.
29:01Uh, final question, Pahendra, is, um, Indonesia, uh, the Indonesian embassy in Kuala Lumpur has just welcomed the new, um,
29:09uh, ambassador.
29:10Yes.
29:11I'm pretty sure you've had, uh, a few, um, conversations with him.
29:15What are some of the areas of, uh, concern that, uh, he will look at in the next few years?
29:22Um, is it economic, uh, uh, growth?
29:25Is it, um, talent mobility?
29:27Is it, uh, green industries the way we spoke of just now?
29:31Where, where's his priorities right now?
29:34Of course, as an ambassador, uh, hopefully, he will be coming here, in Astro also, to, to speak.
29:43But before that, as an ambassador, the ambassador has to maintain all the political, economic, social, et cetera, defense, et
29:52cetera.
29:52But the essence, what is a foreign policy? What is a geopolitic?
29:57Why now everybody is, uh, doing the geopolitics?
30:01Because geopolitics will lead to the geoeconomic.
30:05Yes.
30:05So, Malaysia is a very potential to have economic cooperation, a very extraordinary, uh, cooperation with Indonesia.
30:17That's why the new ambassador is here.
30:19He has a very large of scope of the cooperation in related to the economics.
30:25So, we are happy to welcome him.
30:29And then, uh, you are going to see, in every, we are going to have this one, uh, in every
30:37three months,
30:38we are going to have some deliverable of cooperation between the two countries.
30:45We want to see the concrete matters, not only at the MOU.
30:48We have already so many MOUs.
30:51Yeah.
30:52So, let's do, what is, yeah.
30:54Some tangible concrete items.
30:55Yeah, tangible concrete, yeah.
30:58Every time we meet, oh, okay, Pak Hendra, apa kabar?
31:00Yeah, we are Saudara Surumpun.
31:02But, nothing.
31:03We want to see, this is the product of Saudara Surumpun.
31:06This is the product of the cooperation of Saudara Surumpun.
31:09The Saudara Surumpun Indonesia should be interpreted and should be seen in the concrete cooperation.
31:16Of course.
31:16This is what we would like to see.
31:18And this is also the, the, the, the focus of our new ambassador in Kuala Lumpur to do that.
31:25Thank you very much, Pak Hendra.
31:26That was Pak Hendra Iskanda, the Minister Kounselor of Economic Affairs at the Embassy of Indonesia in Malaysia.
31:32Of course, there's a lot more that can be discussed and, uh, be understood and learned.
31:36Uh, just head on to Astro Awani and find out more there.
31:39Until then, thanks very much for watching. Catch you in the next one.
31:41Thank you, Pak Ibrahim.
31:42Thank you so much.
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