Govt seeks defence trade-offs in exchange for palm oil


THE government is actively seeking trade-off deals to upgrade its defence assets in exchange for palm oil, said Defence Minister Mohamad Sabu.

The minister, who is scheduled for a work visit to Moscow tomorrow (April 20), said the government is currently engaging with several nations including Pakistan, Russia and China, on barter deals for the purchase of new military assets including aircraft, weaponry and even software.

“Barter trade, yes. We are in negotiations with Pakistan, Russia and China. In fact, I will be heading to Moscow tomorrow to meet with the Russian Defence Minister where this matter will be deliberated.

“All of these countries which I have mentioned have indicated their willingness to work on a trade-off deal. We are working diligently towards this and if it is accepted, I believe the price of palm oil will see an increase in the future. Some countries even said their jets can use palm oil (biofuels). We will see about that,” Mohamad said in a group media interview at Kuala Lumpur today.

Malaysia received various offers from arms-producing countries during the Langkawi International Maritime and Aerospace Exhibition 2019 last month, with Russia’s top procurement official Viktor Kladov claiming that Kremlin was committed to bump up its purchase of Malaysian palm oil.

Currently, Russia imports 90% of palm oil from Indonesia and Kladov said this could change to favour Malaysia.

Mohamad said Malaysia’s “frustration” over France’s palm oil curb had forced the country to consider alternatives.

Prime Minister (PM) Tun Dr Mahathir Mohamad in March said Malaysia may consider China-made jets instead of European-made to retaliate against the bloc’s restriction on palm oil.

“Dr Mahathir may have said it, but we have not come to any decision. Clearly, we are frustrated with France because we have made many procurements with them.

“AirAsia Group Bhd, for example, has purchased nearly all of their airplanes from Airbus SE. Even at the ministry, we procure a lot of assets including submarines from France.

“The PM’s statement implied that Malaysia has options, but so far nothing has been confirmed yet,” he said.

However, Mohamad said that any decisions to purchase new defence assets will take into account the country’s fiscal position given that the government has allocated billions of ringgit to “save” institutions such as Lembaga Tabung Haji (TH) and the Federal Land Development Authority (Felda).

“It will be done based on needs, and most importantly, based on our financial capacity. At the moment, the government has allocated up to RM24 billion to save Bumiputera institutions like TH and Felda to prevent an economic disaster.

“What this means is even if there are cost-savings in, for instance, the East Coast Rail Link worth RM21 billion, the money is not channelled to government coffers but pumped into TH and Felda instead,” he said.

In June last year, Royal Malaysian Air Force Chief General Tan Sri Affendi Buang revealed that more than 40% of its assets have surpassed the 20-year lifespan which would necessitate an upgrade, including the Hawk aircraft made by BAE Systems Inc, which have been in service for 25 years, the US-made Boeing F/A-18D Hornet (20 years) and the Sukhoi Su-30MKM Flankers made in Russia (10 years).