Malaysia hopes to pay for military equipment with palm oil, says minister
Published 14 hours ago on 26 August 2019
KUALA LUMPUR, Aug 26 — Malaysia is in talks with at last six
countries on the possibility of using palm oil to pay for arms, as
South-east Asia’s third-biggest economy seeks to replace old equipment
to boost its defence capabilities.
Malaysia has struggled to update its defence equipment over the years
and a cut in its defence budget this year all but derailed efforts to
replace navy ships, some of which have been in service for 35 years or
more.
Costs have been a big hurdle but using palm oil to help pay for
equipment could open new avenues to upgrade, Defence Minister Mohamad
Sabu said today.
Mohamad said discussions on paying with palm oil had started with China, Russia, India, Pakistan, Turkey and Iran.
“If they are prepared to accept a palm barter trade, we are very
willing to go in that direction,” Mohamad told Reuters in an interview.
“We have a lot of palm oil.”
Malaysia and Indonesia, the world’s two largest palm oil producers,
are embroiled in a dispute with the European Union over a plan to phase
out the commodity from renewable fuels used by the bloc by 2030 over
deforestation concerns.
The two countries supply about 85 per cent of global palm oil, much
of which is used in food but also in items such as lipstick and soap.
Mohamad said he could not put a figure on how much palm oil Malaysia was looking to trade for defence equipment.
Besides new ships, Malaysia was also keen to acquire long-range
surveillance aircraft, unmanned aerial vehicles and fast intercept
boats, the minister said. Defence revamp
The planned barter is part of a 10-year defence policy to be tabled
in parliament this year, which Mohamad said would focus on boosting
naval capabilities, including in the disputed South China Sea.
China claims historic jurisdiction over the sea via a so-called
nine-dash line on maps, but it overlaps with territory claimed by
Malaysia, China, Vietnam, Brunei and the Philippines.
Taiwan also claims most of the sea.
Recent Chinese naval deployments in the disputed sea, through which
over US$3.4 trillion in goods are transported annually, have reignited
tension with Vietnam and the Philippines.
Malaysia had been critical of China’s South China Sea position, but
has not been excessively outspoken recently, especially after China
pumped in billions of dollars into infrastructure projects under its
Belt and Road Initiative.
Malaysia regularly tracked Chinese naval and coastguard vessels
entering Malaysia’s territorial waters, Mohamad said, but added that
China respects Malaysia and had “not done anything that caused us
trouble, so far”.
However, South-east Asian counties would need to work together to
make sure their interests are not drowned out by big powers like the US
and China jostling for control, Mohamad said.
“We want this region to remain peaceful and neutral,” Mohamad said. — Reuters
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