15.10.2020 (www.nst.com.my) - LETTERS: Against the backdrop of a global economic slowdown due to the impact of the Covid-19 pandemic, the country's economic players welcomed Bank Negara Malaysia's announcement recently of its 2020 forecasts for the country's gross domestic product (GDP).
As anticipated, the GDP would be sliding downwards, between -3.5 and -5.5 per cent, but the economy is expected to pick up again next year. Figures released by the World Bank and the International Monetary Fund have confirmed a similar contraction for the world economy.
Putting the economy back on track will require more creativity from all quarters. On the government's part, it has moved rapidly into high gear to restore confidence in the economy with the introduction of resilience-enhancing financing packages, such as Prihatin and Penjana.
Such actions have benefited big players, small- and medium-sized industries and retail businesses.Generally, in deciding who is to get what, the government is more inclined to go on a case by case basis and let the "big guys" take care of themselves.
Being creative in the economic sector will require multiple approaches from all players. This includes Petronas and the palm oil industry.What is needed is an exercise at "content creation". Petronas, a rising global player in the oil and gas sector, has moved to apply the "oil-energy-peace" (OEP) formula to reduce tensions in the South China Sea arising from overlapping claims between China and countries in the region.
Petronas, as one of Malaysia's biggest player and an active global player in the oil industry, has moved to work with its Chinese counterpart by offering the latter an opportunity to jointly explore future oil prospects in Iraq.
According to sources, China has welcomed such cooperation. In turn, China has been keeping its navy ships from further encroaching upon the waters of Beting Patinggi Ali, an island at the southernmost tip of the South China Sea, claimed by Malaysia.
Similarly, Malaysia may well decide to apply the OEP formula to help resolve the present impasse over the export ban of our palm oil in Europe and, most recently, the United States.
Malaysian palm oil has been a high contributor to the country's GDP and has attracted considerable success in overseas markets.
In 2018, palm oil contributed 4.5 per cent to the country's GDP. It is timely that one of the world's biggest producers like Malaysia go the extra mile by exploring long-term deals with consumers abroad.
If Malaysia decides to take the issue of the ban to the World Trade Organisation, observers and industry players would see it as counter-productive in the longer term. A tit-for-tat response such as the above will defeat the government's intention to enhance economic diplomacy.
Government agencies and industry players, including the Malaysian Palm Oil Board (MPOB) and Felda Global Ventures (FGV), may want to begin talks with other producers to agree on a united front among palm oil producers and get the Council of Palm Oil Producing Countries (CPCOC) to address common problems such as pricing, standards and certification, labour and land clearance for planting.
Alternatively, as in the case of Petronas, the OEP formula will also make the industry refocus on palm oil as a clean oil source for energy besides being essential in food and pharmaceuticals.
As for the peace element in the OEP formula, the MPOB, FGV and CPCOC may consider moving into pharmaceuticals in a big way and collaborate with countries overseas to produce the much-needed vaccine for the Covid-19 virus for distribution to refugees and migrants around the world.
Former ambassador, Kuala Lumpur