By - Dr Yusof Basiron, CEO of the Malaysian Palm Oil Council
Food and fuel; fuel and food. The two essentials that humanity has sought to produce, and provide for, since time immemorial. Palm oil – used by the ancient Egyptians, then more recently cultivated in West Africa and latterly in Malaysia and Indonesia – is a source of both.
A new Malaysian Palm Oil Council-commissioned study from the economics consultancy Europe Economics measures, for the first time, the economic benefits that palm oil provides to the global economy – billions of dollars in GDP benefits; millions of jobs created and sustained; downstream industries nourished.
In Malaysia, we know all about the benefits of palm oil. Oil palm cultivation is a source of income and pride for 300,000 small farmers in Malaysia, bringing investment and prosperity to previously desolate rural communities. Over 1 million Malaysians are engaged in the palm oil sector, and the positive tax revenue for producing countries is invaluable.
What is different about this new work from Europe Economics is that it does not measure those impacts in producing countries. Rather, it measures purely the impact that palm oil has on the countries that import the commodity – China; India; the European Union; the United States, and others.
The research finds that $39 billion of GDP benefits are attributable to palm oil imports, representing 2.9 million jobs around the world. In India alone, the world’s biggest importer, over 1 million jobs are sustained; in China, the economy benefits to the tune of $7 billion of GDP on an annualized basis. Western markets benefit just as much – over $6 billion of positive GDP impact across the European Union, including 17,000 jobs in Germany; 12,000 in the United Kingdom; and 18,000 in Italy. In the United States, the positive employment reaches 62,000 jobs – and a GDP boost of $6.5 billion. Palm oil is a truly global product, and this new research illustrates that the benefits are shared between producers and importers.
Why is this important? It is no secret that campaigns are underway in some countries to restrict the use of palm oil – often on the basis that palm oil is harmful to the environment or that there are ‘possible’ health concerns. Malaysia has strict and well-enforced environmental laws and regulations, and the Malaysian Government protects over 50% of land area as forest, a unique environmental commitment recognized by the United Nations. As a food ingredient, palm oil is a balanced fat, typically used as a replacement in food for industrially-produced trans fats.
When criticism of palm oil emerges in Europe, it is valuable and important to know and understand the benefits of palm oil to European economies. Europe Economics’ research shows that almost every major economy benefits from palm oil imports, often to the tune of thousands of jobs and millions of dollars. In Malaysia, we know about the benefits that palm oil brings to our country. Those benefits, in the era of globalization, are now being shared with everyone.
The full study and data can be viewed at www.palmoileconomics.org