10/3/07 (The Jakarta Post,)  - Indonesia and Malaysia are considering teaming up to market their main export commodities, crude palm oil (CPO) and rubber, through the establishment of a joint commodities bourse.

Speaking during a meeting Friday with members of the Malaysian Chamber of Commerce and Industry in Jakarta, Vice President Jusuf Kalla said the Indonesian government would consider revising the relevant regulations on investment, taxation and the capital markets in order to facilitate the plan.

"Given the current circumstances, it would be better for Indonesia and Malaysia to improve their cooperation, rather than for them to compete with each other," Kalla said in response to suggestions brought up during the meeting, which was also attended by senior executives of the Indonesian Chamber of Commerce and Industry (Kadin).

Kalla said that by establishing a joint commodities bourse, Indonesia and Malaysia would also be able to better control the prices of their commodities, particularly CPO and rubber.

"If we compete with each other, we will both suffer losses from falling prices. Neither do we want to be dependent on other countries that control the markets for our commodities," Kalla said.

Indonesia and Malaysia are neck and neck in their efforts to become the world's biggest CPO producer, with each producing 15.9 million tons last year, or 85 percent of global production.

Indonesia's CPO production is expected to rise again to 16.8 million tons in 2007, while Malaysia's is forecast to increase to 16.3 million tons.

The two countries are also major natural rubber producers, and together with Thailand account for 80 percent of world production, with Indonesia alone producing 2.4 million tons.

To further foster Malaysian investment in the production of the two commodities, Kalla said the government would look into the possibility of providing incentives and simplifying procedures for acquiring land permits.

Kalla said he hoped that this would be possible after the enactment of a new investment law, and amendments to the taxation legislation, by the House of Representatives within the next one or two months.

The passage of the investment bill is set to miss its March deadline as the House and government are still at odds over investment incentives. The taxation law amendment bills are also still under deliberation.

Kalla said that the government would also simplify the procedures for Malaysian publicly-listed plantation companies that took out cross listings on the Indonesian stock exchange.

Indonesian Listed Companies Association (AEI) chairman Airlangga Hartanto said during the meeting that the dual listing of the two countries' plantation companies would further support the proposed joint marketing efforts.

"The Capital Market Supervisory Agency (Bapepam) is currently considering issuing a regulation allowing foreign companies to be listed more easily on Indonesia's bourse," he said.

"I don't think it would be too difficult as we already have similar accounting standards, and what's important is uniformity in the financial reports issued by companies to the investing public."

Malaysia's Federation of Public Listed Companies chairman Dato' Seri Megat Najmuddin Khas concurred with Airlangga, saying that several Malaysian firms had expressed an interest in dual-listing in Indonesia.