The Star Online (29/04/2019) - AMID the bloating palm oil stockpile and unstable prices, the government has finally rolled out its B10 biodiesel programme, with an increase of 3% palm oil content compared to the previous B7 version. Unfortunately, the European Union (EU) hasn’t been supportive of this move and has labelled it as an unsustainable fuel. Thankfully, China has come to our rescue by buying more of this commodity from us, while imports of palm oil by the EU have been on the decline for quite some time. A friend in need is a friend indeed.

If the EU proceeds to implement its resolution to import only sustainable palm oil certified by a single EU-sustainability certification scheme after 2020, the impact on this industry will be too great. If that happens, what will be the prospects of the many local plantation companies and the 650,000 smallholders who rely on this commodity for their livelihood?

It’s good to know our Prime Minister, Tun Dr Mahathir Mohamad, could feel the sincerity of the Chinese government in helping our country not only by buying more palm oil but also in developing infrastructure projects through the Belt and Road Initiative. Within a week, the Prime Minister announced the revival of two stalled mega projects, ie, the East Coast Rail Link and Bandar Malaysia. Two companies from China are actively involved in carrying out these projects.

For the past two decades, China has been developing fast enough to overtake Japan and become the second largest economy worldwide in 2010. With so much excess capacity, it has to invest a substantial portion of its surplus in other countries so as not to overdevelop its own country to an unsustainable level. By helping others, China is also helping herself because the progress of other nations will directly enhance bilateral trade. It’s a win-win situation.

The revival of the Bandar Malaysia project is a step in the right direction in developing Malaysia as a trade and financial hub in this region, instead of directing our resources to an unviable third national car project. Big multinationals like Alibaba and Huawei have signalled they are interested in setting up their information and communications technology centres there. The strategic location of this project may attract many other multinational corporations to follow suit.

The local stock market has been in the doldrums for too long. The revival of the two mega projects will hopefully spur interest in the market again, as many stocks are trading very much below their net asset values. Initially, the momentum may start with construction and building material manufacturing stocks before it spills over to other counters. Obviously, foreign funds will not want to miss in the opportunity to share in a slice of the pie.

Those who voted in the Pakatan Harapan coalition on May 9, 2018, will be eager to see corrupt politicians tried and put behind bars accordingly. However, they also expect the new government to take effective measures to stimulate the local stock market. A bullish share market can act as a catalyst to stimulate the economy.