SBY gets $3b investment commitment from Middle East

Riyadi Suparno ,  The Jakarta Post ,  Dubai   |  Sat, 03/22/2008 1:40 PM  |  Headlines

President Susilo Bambang Yudhoyono has secured a total of $US3 billion in future investment for Indonesia after meeting with dozens of business leaders from the Middle East here Wednesday.

Among those who made a commitment was Emaar Properties, which signed a joint venture agreement with state-owned Bali Tourism Development Corporation on Wednesday to build an integrated tourism project in southern Lombok, West Nusa Tenggara, with a total investment of $600 million.

During the initial stage, they will build Ritz Carlton and Giorgio Armani hotels and related tourist facilities such as a world-class golf course.

Ras Al-Khaimah (RAK), through its subsidiary RAK Investment Authority, will invest a total of $1.3 billion in South Sumatra to build an integrated port at Tanjung Api-Api and a railway line from Palembang to Tanjung Api-Api.

Another company that made a large commitment is conglomerate Pacific Inter-Link, which has had a presence in Indonesia since 1999 with an initial investment of $150 million.

The company plans to invest further by building a palm oil refinery plant in Dumai, Riau, with a total investment of $500 million. Pacific Inter-Link also plans to enter Indonesia's banking sector.

A large commitment also came from Al Ghurair Group through its subsidiary ETA Star, which specializes in repairing and improving old refinery plants.

ETA Star plans to invest around $500 million to enter Indonesia's refinery industry, in cooperation with the country's existing refinery plant operators.

President Yudhoyono said the commitments would not translate into real projects unless all parties in Indonesia, especially the government, helped the investors in realizing their investment commitments.

Therefore, he said, he would ask his ministers, the head of the investment agency and heads of the local governments that would host the projects to facilitate the implementation of the investment plans.

"We have worked hard to build their confidence to invest in our country," Yudhoyono told a press conference after meeting the business leaders.

"We don't want this effort to turn sour because of hurdles on our side, in our bureaucracy, at either the central or the local government levels."

According to the Institute of International Finance, member countries of the Gulf Cooperation Council -- Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Bahrain and Oman -- hold an excess investment liquidity of $1.5 trillion a year because of their oil bonanza.

Of this excess investment liquidity, $1 trillion is invested in their own countries, $300 billion in the United States and $100 billion in Europe, with only $60 billion invested in Asia and $40 billion elsewhere.

Indonesia's exports to Dubai increased by 51 percent to $1.1 billion last year, while imports from Dubai stood at only $54 million. Dubai represents the largest portion of Indonesia's exports to the UAE, which totaled $1.3 billion last year.

Indonesia's main exports include textiles, jewelry, electronics, automobiles, paper, tires, steel, shoes and cocoa.

There are now about 72,000 Indonesian workers in the UAE, many of whom work in Dubai. An increasing number of skilled workers are entering Dubai, mostly in the hospitality and construction industries, especially since the entrance of state-owned developer PT Waskita Karya.

Waskita Karya is developing a $60 million infrastructure project in Dubai for the Bin Ladin Group. The company employs 360 Indonesian workers for the project.

Waskita Karya has been entrusted to develop another infrastructure project worth $160 million, for which the company will bring in another 600 Indonesian workers.

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