JAKARTA - Indonesia and Malaysia today agreed to step up cooperation in the fight against increasing piracy and smuggling on their common land border on Borneo island.

"Concerning the increasing cases of sea piracy, our countries are determined to continuously tackle the problem," President Megawati Sukarnoputri said after talks with visiting Malaysian Prime Minister Abdullah Ahmad Badawi.

"At the same time we will continue efforts to prevent smuggling, including the smuggling of timber, people, and weapons," Megawati said.

The Malacca Strait, a narrow waterway straddling Malaysia, Indonesia and Singapore, is notorious for piracy and security experts warned recently that terrorists could be roaming the waterway to hijack ships.

The strait, which links the Indian Ocean to the South China Sea and the Pacific, is crucial to export-driven Southeast Asia.

In June last year, Malaysia banned imports of sawn timber from Indonesia after some international environmental watchdogs accused Malaysia of failing to take action to halt illegal logging, saying it was acting as a laundering centre for illegal timber.

Malaysia has denied the allegations.

On going discussions

Abdullah said Indonesia and Malaysia needed to improve investment and trade involving businessmen from the two countries.

"We will continue discussions to accelerate the establishment of a bilateral payment arrangement to boost trade," Abdullah said.

The prime minister also said a memorandum of understanding will be signed on the recruitment of migrant workers from Indonesia.

Abdullah's visit to Indonesia is part of a traditional introductory tour by new leaders in Southeast Asia.

He made a similar visit to Brunei last month and is scheduled to visit Singapore on Jan 12. - AFP