The Government of Malaysia and the Government of the Republic of Indonesia, hereinafter referred to as the Contracting Parties; 

Bearing in mind the friendly and cooperative relations existing between the two countries and their peoples; 

Desiring to expand and deepen economic and industrial cooperation on a long term basis, and in particular, to create favourable conditions for investments by investors of one Contracting Party in the territory of the other Contracting Party; 

Recognising the need to protect investments by investors of both Contracting Parties and to stimulate the flow of investments and individual business initiative with a view to the economic prosperity of both Contracting Parties; 

Considering the Agreement amongst the Governments of Brunei Darussalam, the Republic of Indonesia, Malaysia, the Republic of the Philippines, the Republic of Singapore and the Kingdom of Thailand for the promotion and protection of investments signed on 15^th December 1987; 

Have agreed as follows: