KUALA LUMPUR: Malaysia’s mammoth palm oil sector faces a new threat after Indian traders were asked to halt purchases amid a diplomatic row over Kashmir, piling further pressure on the industry as Europe also plans cutbacks.
The Southeast Asian nation is the second-biggest producer after Indonesia of the oil, used in everything from food to cosmetics, in a sector long vilified by environmentalists who blame it for fueling deforestation.
With Western companies reducing use of the commodity as green groups ratchet up pressure, the top two growers have increasingly come to rely on demand from India, the world’s biggest buyer of edible oils, and China.
But a speech by Malaysian Prime Minister Mahathir Mohamad at the United Nations General Assembly last month, in which he said New Delhi had “invaded and occupied” Kashmir, has sparked a backlash in India that could badly hit the sector.
There has been sympathy in mostly Muslim Malaysia for Kashmiris after the Hindu nationalist government in New Delhi revoked the Muslim-majority region’s autonomy in August, and imposed a lockdown to quell unrest.
Kashmir has been split between India and Pakistan since 1947, and has sparked wars and numerous skirmishes between the two countries. An armed rebellion against Indian rule has raged in the valley since 1989.
Mahathir’s comments prompted calls for Indians to shun Malaysian products — with social media users posting angry messages alongside the hashtag #BoycottMalaysia — while rumors swirled New Delhi may hike tariffs on Malaysian palm oil.
Earlier this week, a major Indian vegetable oil trade body called on its 875 members to avoid buying palm oil from Malaysia, noting the government was mulling retaliatory measures.
“In your own interest as well as a mark of solidarity with our nation, we should avoid purchases from Malaysia for the time being,” said Atul Chaturvedi, president of the Solvent Extractors’ Association of India.
It is a blow for Malaysia, as India was the country’s third-biggest market for palm oil and palm oil products in 2018, with a value of 6.84 billion ringgit ($1.63 billion).
Teresa Kok, the minister who oversees the commodity, scrambled to defuse tensions, describing the association’s move as a “major setback” and saying Malaysia was looking at increasing imports of sugar and buffalo meat from India.
The row is a further hit to the sector in Malaysia after the European Union announced plans to phase out palm oil in biofuels by 2030. Malaysia and Indonesia have vowed to fight the move, saying it could damage the livelihoods of millions of small-scale farmers.
Despite attempts by some Malaysian officials to calm the spat, calls are growing in India for Prime Minister Narendra Modi’s government to curb palm oil imports.
Such a move would signal that “countries gaining economically from India while criticizing the country politically will not have a free run anymore,” Neelam Deo, director of Mumbai-based think-tank Gateway House, told AFP.
Tensions have also risen between India and Turkey after President Recep Tayyip Erdogan told the UN General Assembly that Indian-administered Kashmir was “besieged.”
Reports have since said that Modi had canceled a planned visit to Turkey as a result, and that India could axe a $2.3 billion order with a Turkish shipyard.
India’s foreign ministry, however, denied that any such visit was planned.
New Delhi has yet to take any formal measures against Malaysia or Turkey but Bloomberg News reported last week that India was considering placing curbs on some imports from both countries, citing people familiar with the matter.
Despite the furor, Mahathir has been unapologetic, reportedly telling journalists last week: “We speak... our minds and we don’t retract and change.”
“Sometimes what we say is liked by some and disliked by others,” added the famously outspoken 94-year-old, known for his acid-tongued attacks on Jews and the West during a first stint in office from 1981 to 2003.
And with nationalistic anger growing in India, the row appears unlikely to end soon.
“It’s not purely a palm oil issue,” James Chin, a Malaysia expert at the University of Tasmania, told AFP. “It ties in with egos... and nationalism.”
Kashmir row sparks Malaysia, India palm oil tensions
Kashmir row sparks Malaysia, India palm oil tensions
- Malaysian PM speech at the UNGA on Kashmir last month, has sparked a backlash in India
- Mahathir's comments prompted calls for Indians to shun Malaysian products -- with hashtag #BoycottMalaysia
Pakistan briefs Chinese investigation team on security measures after deadly suicide bombing
- Five Chinese nationals were killed on Tuesday in northwestern Pakistan when a suicide bomber targeted their vehicle
- Pakistan has since then enhanced security for Chinese personnel in the country, vowed to punish culprits of the attack
ISLAMABAD: Pakistan’s Interior Minister Mohsin Naqvi on Friday briefed a Chinese investigation team on a suicide attack in Pakistan’s Shangla, which killed five Chinese nationals this week, promising to bring to justice the perpetrators of the deadly bombing.
Five Chinese nationals and their Pakistani driver were killed on Tuesday in the northwestern Pakistani district of Shangla, when a bomber rammed his explosive-laden car into their vehicle.
The victims were en route to a hydropower project when the attack occurred in an area vital to the Chine-Pakistan Economic Corridor (CPEC), part of Beijing Belt and Road Initiative (BRI).
Naqvi visited the Chinese embassy in Islamabad to brief the special investigation team that arrived from China, according to the Pakistani interior ministry.
“In the meeting, measures for the protection of Chinese citizens and overall security were discussed,” Naqvi’s ministry said in a statement. “The real culprits of the Shangla attack will be brought to justice,” the statement quoted the minister as saying.
Naqvi also met the Chinese ambassador and shared with him updates regarding the attack, according to the statement.
Tuesday’s attack came less than a week after Pakistani security forces killed eight Balochistan Liberation Army (BLA) separatists, who opened fire on a convoy carrying Chinese citizens outside the Chinese-funded Gwadar port in the volatile southwestern Balochistan province.
Hundreds of Chinese engineers and technicians have been working on projects, primarily in Pakistan’s northwest and southwest, under CPEC — a network of roads, railways, pipelines and ports in Pakistan that will connect China to the Arabian Sea and help Islamabad expand and modernize its economy.
Beijing has pledged to invest over $65 billion in energy and infrastructure projects in Pakistan as part of the corridor.
The interior minister’s meeting with the Chinese team came a day after Chinese foreign ministry spokesperson Lin Jian said his government believed Islamabad would hold accountable the perpetrators of the deadly attack.
“The Pakistani side is working intensively to investigate and handle the aftermath and has taken concrete steps to enhance security for Chinese personnel, projects and institutions,” Lin told reporters during a press briefing.
“We believe Pakistan will get to the bottom of the attack and bring the perpetrators to justice as soon as possible.”
In a first, foreign minister replaces finance chief in Pakistan’s largest decision-making body
- The CCI decides matters like distribution of natural resources upon which there is disagreement between center, provinces
- Members of the council include four provincial chief ministers as well as foreign, defense and frontier regions ministers
ISLAMABAD: The Pakistani government this week constituted the Council of Common Interests (CCI), with the foreign minister replacing the finance chief in the decision-making body.
The CCI is a constitutional body and its members are appointed by the president on the advice of the prime minister. The council resolves power-sharing and other disputes between the federation and the provinces.
Members of the council include four provincial chief ministers, Foreign Minister Ishaq Dar, Defense Minister Khawaja Asif, and State and Frontier Regions Minister Ameer Muqam, according to a government notification.
“In exercise of the powers conferred under Article 153 of the Constitution of Islamic Republic of Pakistan, the president, on the advice of the prime minister, has constituted the Council of Common Interests, with effect from 21st March,” read the notification dated March 25.
“This supersedes Secretariat of CCI’s notification of even number, dated 9th January.”
The CCI is the largest decision-making body in the country that decides matters like the distribution of natural resources, upon which there is a disagreement between the center and provinces.
The top forum is headed by the prime minister.
Pakistan official says China halts work on two projects after deadly attack
- The companies have demanded Pakistan authorities come up with new security plans before reopening the sites
- The security of Chinese workers, who are frequently targeted by militants, is a major concern to both countries
PESHAWAR: Chinese contractors have halted construction on two major dam projects in Pakistan after a suicide bomber killed five Chinese engineers and a Pakistani driver this week, a provincial official told AFP on Friday.
The companies have demanded that Pakistan authorities come up with new security plans before reopening the sites where around 1,250 Chinese nationals are working, the official said.
The security of Chinese workers is a major concern to both countries, with nationals frequently targeted by militants hostile to outside influence.
The workers were targeted on Tuesday by a suicide bomber who rammed into their vehicle on a mountainous road near one of the dam sites.
He detonated his explosives on impact, plunging their vehicle into a deep ravine.
A senior official from the Khyber Pakhtunkhwa interior department told AFP on condition of anonymity that since Wednesday, China Gezhouba Group Company has halted work on the Dasu dam in the province and Power China has stopped work on Diamer Bhasha dam, which straddles two provinces.
“They have demanded new security plans from the government,” he said.
“Around 750 Chinese engineers are engaged in the Dasu Dam project, while 500 are working on the Diamer Bhasha Dam,” he added.
He said the movement of Chinese engineers has been restricted to the compounds where they live, close to the sites.
China has not commented, but this week repeatedly urged Pakistan to ensure the safety of its nationals.
Beijing is Islamabad’s closest regional ally, readily providing financial assistance to bail out its often-struggling neighbor.
China has inked more than two trillion dollars in contracts around the world under its Belt and Road investment scheme, with billions pouring into infrastructure projects in Pakistan.
But Pakistanis have long complained that they are not getting a fair share of jobs or wealth created by the projects.
Tuesday’s attack sparked a flurry of diplomatic activity at the Chinese embassy in Islamabad, with Prime Minister Shehbaz Sharif and the foreign and interior ministers offering condolences in quick succession.
China’s foreign ministry declared the countries “iron-clad friends” but asked Pakistan to “take effective measures to ensure the safety and security of Chinese nationals, projects, and institutions.”
Tuesday’s attack came just days after militants attempted to storm offices of the Gwadar deepwater port in the southwest, considered a cornerstone of Chinese investment in Pakistan.
In 2019, gunmen stormed a luxury hotel in Balochistan province overlooking the flagship Chinese-backed deepwater seaport in Gwadar that gives strategic access to the Arabian Sea — killing at least eight people.
In June 2020, Baloch insurgents targeted the Pakistan Stock Exchange, which is partly owned by Chinese companies, in the commercial capital of Karachi.
Pakistan reviewing proposal for resumption of trade with India — Foreign Office
- Pakistan suspended trade with India after New Delhi’s revocation of special autonomy of Indian-administered Kashmir in 2019
- The rift has since impacted businesses on both sides who previously traded in textiles, agricultural products and medical supplies
ISLAMABAD: Pakistan’s Foreign Office said on Thursday it was reviewing a proposal from the business community to resume trade with India.
Pakistan downgraded its diplomatic relations and suspended bilateral trade with India after New Delhi’s revocation of the special constitutional status of Jammu and Kashmir in August 2019.
The geopolitical rift between the two countries has since impacted businesses on both sides who previously benefited from cross-border trade in textiles, agricultural products and medical supplies.
Speaking at a weekly press briefing, Foreign Office spokesperson referred to a statement by Foreign Minister Ishaq Dar and said the business community had expressed in review of trade with India.
“Examination of such proposals is a regular exercise in the Government of Pakistan, including the Ministry of Foreign Affairs, where we continue to consider all such requests and assess our policy,” she said.
Baloch, however, clarified that there was no change in Pakistan’s position at present.
The Muslim-majority Himalayan region of Kashmir has been a flashpoint between Pakistan and India since their independence from the British rule in 1947.
Both countries rule parts of the Himalayan territory, but claim it in full and have fought three wars over the disputed region.
Pakistan PM says modernizing revenue collection system to revive frail economy
- Pakistan is currently making efforts to introduce economic reforms under an IMF program that helped it avert a default last year
- Islamabad has expressed interest in a new program, expected to come with fiscal tightening measures, including increase in revenue
ISLAMABAD: Pakistan Prime Minister Shehbaz Sharif said on Thursday his government was working to modernize the country’s revenue collection system to revive the frail $350 billion South Asian economy, describing it as “top priority” of his administration.
Pakistan, which has been facing an economic meltdown, is making efforts to introduce structural reforms under a $3 billion International Monetary Fund (IMF) program that helped it avert a sovereign default last year.
The country this month cleared second and final review of its $3 billion International Monetary Fund (IMF) program which would pave the way for the release of $1.1 billion after helping Islamabad avert a default in last June.
Islamabad has expressed its interest in securing a new loan under the Extended Fund Facility (EFF) program with the IMF, which is expected to come with fiscal tightening measures, including an increase in revenue.
“A plan is underway to modernize revenue collection system,” PM Sharif was quoted as saying by the state-run Radio Pakistan broadcaster.
“The Federal Board of Revenue is being fully digitized and efforts are afoot to increase the tax base.”
He said a “whole-of-government approach” was being adopted to check power theft that was worth billions of rupees, according to the report.
Privatization of government-owned enterprises, institutional reforms, internal and external investment and austerity were also the government’s priorities in this regard, he added.