TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Development funds sought from Malaysia
Struggling with a limited state budget to support its key infrastructure projects, the country is exploring opportunities to secure funding from foreign investors, including from neighboring nations
Change Size
Struggling with a limited state budget to support its key infrastructure projects, the country is exploring opportunities to secure funding from foreign investors, including from neighboring nations.
During a visit to Kuala Lumpur earlier this week, Trade Minister Enggartiasto “Enggar” Lukita said foreign investment from neighboring countries, such as Malaysia, would be crucial to help boost the country’s infrastructure development in various sectors, including logistics.
“We want to bring in more foreign investors to improve our logistics sector and others to improve people’s livelihoods and purchasing power,” he said on Thursday during a networking forum attended by businesspeople from both countries hosted by Malaysian based lender CIMB Niaga.
Indonesia aims to build thousands of kilometers of toll roads, dozens of dams, airports and seaports as well as power plants to provide an additional 35,000 megawatts (MW) of electricity to the current system by 2019. The country has also been working to reduce stubbornly high logistics costs that now account for more than 20 percent of its gross domestic product (GDP).
Indonesia’s infrastructure projects will cost Rp 5.5 quadrillion (US$420.9 billion) by 2019, National Development Planning Agency (Bappenas) data shows. The state budget, however, can only cover around 40 percent of the figure.
Enggar noted that last year, Malaysia was Indonesia’s second-largest investor with $3.1 billion-worth of foreign direct investment (FDI), comprising $2.1 billion in transportation, storage and communication; $298.4 million in construction; $32.9 million in real and industrial estate and other business activities; $29.4 million in electricity, gas and water supplies; and $25.5 million in trade-related sectors, among others.
Malaysian International Trade and Industry Minister Sri Mustapa Mohamed, shared a similar view, saying businesspeople from both countries needed to collaborate more in building sectors, including infrastructure in Indonesia.
“Despite the establishment of the Malaysia-Indonesia Business Council [MIBC], the level of interaction among the business community is still not very encouraging,” he said at the event.
However, earlier on Thursday, MIBC chairman Tun Ahmad Sarji Abdul Hamid pointed at the lack of local partners to work with and absence of follow-up from Indonesian governors and regents in regard to their interest in building ports and roads.
Indonesian Chamber of Commerce and Industry (Kadin) chairman Rosan P. Roeslani suggested that counterparts also consult with Kadin’s business support desk to help them connect with potential local partners.
“We have a complete database of selected partners,” he said.
Based on data from Bank Negara Malaysia, Malaysian investment in Indonesia was valued at $15.19 billion for the 2008-2015 period, mainly in plantation, oil, gas, banking, telecommunication and construction.
Major Malaysian companies in Indonesia include palm oil producer Sime Darby, KL Kepong, Genting, IOI, CIMB, Maybank, Axiata, UEM, Petronas and Schomi. UEM has participated in constructing the 116-km Cikampek Palimanan toll road in West Java.
