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COMMENTARY: Saudi investment: Not big but not too small
As many as 11 memorandums of understanding (MoU) on cooperation were signed during the king’s visit, covering a wide range of fields, including joint efforts to fight terrorism, people smuggling and drug trafficking.
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President Joko "Jokowi" Widodo (center) along with Saudi Arabia's King Salman (right). (State Palace/Leily Rachev)
S
audi Arabian King Salman bin Abdulaziz Al Saud received a warm and friendly welcome from almost all the Indonesian people during his historic visit to the country, the first Saudi monarch to visit the world’s largest Muslim-majority country since 1970.
The visit not only further deepened the two country’s long-established relations but also marked the Indonesian people’s strong emotional attachment to the Middle Eastern country, where nearly 1 million Indonesian Muslims conduct pilgrimages to Mecca each year.
Besides top government officials, King Salman, who is still on vacation in Bali until Sunday, also met with religious leaders during his official visit in Jakarta.
As many as 11 memorandums of understanding (MoU) on cooperation were signed during the king’s visit, covering a wide range of fields, including joint efforts to fight terrorism, people smuggling and drug trafficking.
In the economic field, the monarch pledged to provide US$1 billion to finance a development project. The Saudi government also reaffirmed the commitment of Saudi Aramco and Pertamina to set up a joint venture to upgrade Indonesia’s largest oil refinery in Cilacap, Central Java. The agreement for the $5 billion refinery expansion was signed in December last year.
Analysts consider the economic deals made during King Salman’s trip as being relatively insignificant given the kingdom’s financial prowess, far lower than Indonesia expected. The government had earlier hoped that the Saudi king would pledge at least $25 billion in investment and other economic deals during the historical visit.
Saudi Arabia’s foreign direct investments is traditionally low. In Indonesia, the country’s direct investments totaled only $900,000 in 2016, among the smallest foreign investors in the country, according to the Investment Coordinating Board (BKPM).
