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3 - Johor’s Oil Palm Economy: Past, Present and Future
- Edited by Francis E. Hutchinson, Serina Rahman
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- Book:
- Johor
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 24 November 2020
- Print publication:
- 01 September 2020, pp 73-106
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Summary
INTRODUCTION
Introduced over a century ago, oil palms are currently Johor's most significant agricultural offering. Over one-third of Johor's entire landmass is planted with oil palms. Thirty per cent of these lands are farmed by independent smallholders, nearly twice the national average (MPOB n.d.-a; MAMPU n.d.). Further downstream, Johor's millers produced one-sixth of Malaysia's crude palm oil in 2018, worth nearly RM7 billion in revenue (MPOB n.d.-b). The territory hosts numerous downstream players pumping out refined palm oil, margarine, specialty fats, oleochemicals, and biodiesel. Johor's two major ports—Pasir Gudang and Tanjung Pelepas—anchor these production clusters, while also exporting RM15.5 billion of vegetable (mostly palm) oil products in 2017—an impressive 28 per cent of Malaysia's world-leading output (DOSM n.d.). Much of this global prominence stems from Johor's long history as an agricultural powerhouse, its forays into resource-based industrialization, and its relative success in becoming a trade hub for edible oils and chemical derivatives.
This essay will survey the oil palm's increasingly heavy presence within Johor's landscape, commerce, and political economy, grounding discussions in broader global and historical contexts where necessary. The paper's next section outlines the oil palm's importance to world trade, the crop's social and environmental complications in Southeast Asia, and the significance of independent smallholder farming arrangements. We then present a brief history of Johor's multilayered oil palm farm sector since its inception. A third section tracks the oil palm's journey through the value chain, mapping out the millers, crushers, refiners, merchants and equipment manufacturers that have consolidated Johor's status as an attractive locale for commodity processing. Having outlined the main commercial players involved, we then turn towards the more political dimensions of Johor's oil palm sector: the electoral significance of Johor's Federal Land Development Authority (FELDA) settler communities, other government-linked entities involved in oil palms, and land control issues, the latter especially dependent on close ties with Johor's state government. Land use concerns also connect with our final section, which looks at how urbanization, landowners and sustainability requirements are influencing the oil palm's future in Johor.
7 - Political Contestation in Iskandar Malaysia: Views on Economic Integration during Malaysia's 13th General Election
- from Section II - Policy and Politics
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- By Khor Yu Leng, Segi Enam Advisors Pte Ltd, Singapore
- Edited by Francis E. Hutchinson, Terence Chong
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- Book:
- The SIJORI Cross-Border Region
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 22 July 2017
- Print publication:
- 14 June 2016, pp 181-206
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Summary
INTRODUCTION
A closer Johor-Singapore economic integration via the Iskandar Malaysia (IM) project has been of high concern to policymakers on both sides of the Causeway. The economic ties between Johor and Singapore date back to the Sultanate of Johor and the colonial era when the former was a key hinterland region with its Singapore-controlled pepper, gambier, rubber and then oil palm plantations (Luraschi and Wruck 2013). Singapore was, along with Johor, part of a group of entities colonized by the British in the Malayan Peninsula. In 1946, while still under colonial rule, Singapore and Malaya — which included Johor — were separated. They were briefly united in the independent Malaysian Federation from 1963 to 1965. In 1965, Singapore separated from Malaysia, thus ending its directly shared history with Johor. An international border plus a twenty-year frosty relationship of the Mahathir-Lee Kuan Yew core period slowed cross-border supply-chain developments and other investments between the two countries. However, during Malaysia's industrialization phase in the 1970s, Singaporean FDI was an important source of funds, with Johor hosting a series of infrastructure works and industrial clusters (Yeung 1998). Thus, economic linkages between Johor and Singapore continued but until recently, there has been a lack of high-key, big transboundary investments by large Malaysia and Singapore private sector companies, including their market-dominating government-linked corporations.
Up until the recent 2007–08 Global Financial Crisis, Malaysia implemented somewhat competitive policies in relation to Singapore. In Johor, projects aiming to steal traffic from Singapore's port include: Tanjung Pelepas, competing over container terminals with the Port of Singapore Authority; and long-hoped-for competition over oil storage and petrochemicals. This includes the on-hold Asian Petroleum Hub which is now on firmer footing via the new Petronas Refinery and Petrochemical Integrated Development (RAPID) project inclusive of the Dialog oil storage terminals and deep-water berthing in Pengerang at the southeastern tip of Johor. However, after nearly twenty years of stop-start projects, punctuated by two major financial crises, the latest Johor policies take on a new cooperative stance with Singapore. This seems to be taking root, engendering confidence among private sector investors from the two countries and beyond. The Iskandar economic corridor story has caught their attention, and the region is abuzz with big property projects and investments in the healthcare, education and tourism sectors.
The Significance of China-Malaysia Industrial Parks
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- By Khor Yu Leng, Institute of Southeast Asian Studies, Singapore
- Edited by Kee Beng Ooi
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- Book:
- ISEAS Perspective
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 08 January 2014, pp 46-54
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Summary
EXECUTIVE SUMMARY
• China and Malaysia have jointly established the Malaysia-China Kuantan Industrial Park (MCKIP) and Qinzhou Industrial Park (QIP) to further boost bilateral trade and investment.
• Investment promoters see Malaysia as a country for China to reach markets with-in country-of-origin rules; and the state of Pahang where the MCKIP is planned will likely be selected as the gateway for bringing investment and jobs into the Malaysia Eastern Corridor, which covers an economically lagging area on the peninsula.
• Sources indicate that the industrial park projects are linked to two significant land deals. The first may relate to the QIP land swap arrangement for land in the Binhai township. The second, at the MCKIP, is said to include the conversion of some state-controlled land for the use of the industrial park.
• Country data indicates a large imbalance in FDI flows with the broad conclusion that Malaysia OFDI flows to China exceeds the reverse by a factor of five to eight times or even more. However these statistics may still misrepresent the picture since many Malaysian tycoons use Hong Kong as a base for their investments into China.
• To begin to correct this imbalance, Malaysia will quickly need to draw in China OFDI equivalent at least to what it has received in recent years from Germany. Such a rapid transformation in Malaysia- China investment outcomes is unlikely without more significant investment drivers in place.
• The relatively small size of the MCKIP (just over a tenth of the size of its twin project in Qinzhou) is suggestive of a continued imbalance in Malaysia-China foreign investments.
INTRODUCTION
China and Malaysia have established two joint industrial parks to further boost bilateral trade and investment. These are government-to-government promoted initiatives, and notably the third such bilateral effort by China after the Suzhou and Tianjin projects with Singapore. The Malaysia-China Kuantan Industrial Park (MCKIP), to be built on 1,500 acres, is located in the less developed Malaysia Eastern Corridor. Announced on 5 February 2013 at a ground-breaking ceremony attended by Jia Qinglin, chairman of China's top advisory body, and Malaysian Prime Minister Najib Razak, this industrial park is the twin project of the 13,600- acre Qinzhou Industrial Park (QIP) being built in Guangxi Province, also a less developed region of China.