20/6/07 (The Jakarta Post ) -  Indonesia and Malaysia are to set up a joint body tasked with exploring opportunities for economic cooperation between the two nations in such lucrative sectors such as crude palm oil, Islamic finance and the halal industry.

This was announced Tuesday after a meeting between Indonesia's Coordinating Minister for the Economy Boediono and Malaysia's Minister in the Prime Minister's Office Dato Sri Mohd. Effendi Norwawi.

"We expect the establishment of the body to enhance collaboration between our two neighboring countries through the identification of potential new opportunities," Boediono said after the meeting, which followed Monday's Malaysia and Indonesia Investment and Finance Summit.

Malaysia has seen its investments in Indonesia increase rapidly in recent years. In 2006, Malaysia's capital inflows into Indonesia rose threefold to $2.2 billion from the previous year.

The government-to-government body will also serve as a facilitator for the private sector in exploring business opportunities in both countries.

"Basically, we're going to sound out all areas where we can work together, and we will share our competitive advantages," Norwawi explained.

"Together, we can become very strong players in many sectors -- including the CPO, halal industry and Islamic finance sectors -- on the global market."

In the CPO industry, for example, the two countries have agreed to develop Indonesia's downstream sector by formulating strategic plans for the sector's growth.

Indonesia and Malaysia are the world's largest CPO producers, with a combined production that supplies some 85 percent of the CPO on the global market.

The two countries, whose citizens are mostly muslims, have also agreed to develop joint Islamic financial products, and the halal industry, including both food and other products.

In addition, the body will also look into the possibility of cooperation in the tourism sector by promoting joint tourism packages, as well as in the SME sector.

The "Malaysia and Indonesia Investment and Finance Summit" was held Monday, and resulted in a number of memorandums of understandings (MOUs) being signed between companies from the two countries.

Indonesian property developer Gapura Prima Group and Malaysian financial services firm Amanah Raya Berhad signed an agreement for the issuing of regional real estate investment trusts (REITs) -- stock-market instruments in the property business -- worth US$250 million.

The REITs, to be listed on the Singapore Stock Exchange by the end of this year, will be focused on the retail property business, Amanah Raya managing director Datuk Mohamed Azahari Kamil.

"We are considering the acquisition of five shopping malls in Indonesia and another two in Malaysia to be warranted in the REITs," Kamil said.

The shopping malls in Indonesia are located in Jakarta, Bandung, Surakarta and Surabaya, while those in Malaysia are located in the Klang Valley and Melaka.

Also on Monday, Gapura Prima and Amanah Raya signed an agreement with state-owned contractor PT Pembangunan Perumahan (PT PP) for the purchase of another shopping mall project in Surabaya.