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Jakarta Post

Jokowi appoints 12 top officials to seek foreign funds

  • Ayomi Amindoni and Liza Yosephine

    The Jakarta Post

  /   Tue, November 24, 2015   /  06:01 pm
Jokowi appoints 12 top officials to seek foreign funds President Joko “Jokowi” Widodo.(Kompas.com)

President Joko '€œJokowi'€ Widodo.(Kompas.com)

President Joko '€œJokowi'€ Widodo has appointed 10 ministers and two ministerial-level officials as foreign investment negotiators with each one assigned to a specific country or economic area.

State Enterprises Minister Rini Soemarno said on Tuesday the appointed officials would work on attracting foreign direct investment (FDI) into Indonesia. Foreign Minister Retno LP Marsudi will be responsible for overseeing the officials.

"The goal is to increase investment, Rini asserted, adding that President Joko Widodo had stressed the importance of developing the country by attracting FDI instead of domestic funding.

Indonesia needs Rp 5,000 trillion (US$384 billion) to build infrastructure in the five years ahead, including developing energy and transportation, according to Rini.

"It is impossible to source funds of that size domestically, meaning we need to invite overseas investors,'€ she said. Minister Rini is one of the 12 appointed officials.

The President also appointed Energy and Mineral Resources Minister Sudirman Said to liaise with countries in the Middle East and National Development Planning Minister Sofjan Djalil to liaise with the Japanese.

Maritime Affairs and Fisheries Minister Susi Pudjiastuti was appointed to invite more investment from the United States and South America. In practice, she will share duties with the Communications and Information Minister Rudiantara. Meanwhile, Trade Minister Thomas Lembong will be the liaison of the European region and Transportation Minister Iqnatius Jonan will be responsible for negotiations with India.

Furthermore, Coordinating Minister for Political, Legal and Security Affairs Luhut Pandjaitan was appointed as liaison with Singapore, while Coordinating Maritime Affairs Minister Rizal Ramli was appointed for Malaysia. Agriculture Minister Suleiman Amran was appointed as a liaison with ASEAN countries outside Singapore and Malaysia.

'€œThe ministers have a duty to be the focal point in solving any issues that may arise from implementing these investment relations,'€ said Cabinet Secretary Pramono Anung.

Pramono added that the Foreign Minister will still hold a key role in the negotiation processes to form economic and investment relations between Indonesia and other countries.

Despite an overall drop in foreign investment across the Southeast Asian region in 2015, Financial Times research has shown that Indonesia remains a lucrative investment destination.

Indonesia'€™s foreign direct investment rose 62.4 percent in the first half of the year to US$13.67 billion, while overall foreign investment in ASEAN countries dropped 3.2 percent to $43.93 billion in the same period, according to the Investment Coordinating Board (BKPM).  

However, Pramono said that President Jokowi has seen that there are issues in the follow-up of these investments between Indonesia and other nations. Pramono emphasized that foreign direct investment was important in stimulating the nation'€™s economy.

Indonesian economic growth has slowed to the lowest level in six years with only 4.7 percent growth in the first half of the year and the rupiah down by 14 percent, making it the second-worst performer in the region. In September, the rupiah broke the 14,000 mark against the US dollar, its lowest level since the 1998 financial crisis.

Pramono explained that the special appointment of the ministers was intended to assign trusted individuals to be directly responsible for forging investment relationships in the country they are assigned to. They will also be the point of contact for foreign investors from their respective nations.

'€œBecause our problems usually emerge in sectorial issues, which mostly do not get solved. Therefore, [...] the President has appointed these specific individuals,'€ explained Pramono.

Among those appointed officials are Energy and Mineral Resources Minister Sudirman Said and Coordinating Political, Legal and Security Affairs Minister Luhut Binsar Panjaitan, both of whom are currently involved in the drama surrounding PT Freeport Indonesia.

Said recently reported House of Representative Speaker Setya Novanto to the ethics council (MKD) for allegedly claiming to speak on behalf of President Jokowi and Vice President Jusuf Kalla in a closed-door discussion about PT Freeport Indonesia'€™s mining contract extension. In those conversations, Luhut'€™s name was also mentioned. However, he has denied the allegations that he was seeking personal gain from his current position.

Jokowi has appointed Said to seek foreign investment from the Middle East, while Luhut will be responsible for attracting investment from neighboring Singapore.

Other ministers appointed to Southeast Asian nations are Coordinating Maritime Affairs Minister Rizal Ramli for Malaysia and Agriculture Minister Amran Sulaiman for Thailand, Vietnam and other nations outside of Singapore and Malaysia.

In the East Asian region, National Development Planning Minister Sofyan Djalil will be responsible for investments from Japan while State-owned Enterprises Minister Rini Soemarno will look to China.

Sofyan recently confirmed that the government had chosen a high-speed rail proposal from China, after a close race for the project tender with Japan.

Sofyan said that Japan'€™s business model and regulations had made it impossible for Indonesia to give concession credit to Japanese companies.

A Japanese feasibility study estimated the high-speed rail project would require around US$6.2 billion while the Chinese proposal forecast a lower cost of $5.5 billion.

Responsible for generating investment from Taiwan and Hong Kong will be Coordinating Investment Board chief Franky Sibarani, while Creative Economy Agency head Triawan Munaf is assigned for South Korea.

Communications and Information Minister Rudiantaara will look after United States and South American investments and Trade Minister Thomas Lembong will pursue investment opportunities from Europe and Australia.

Maritime Affairs and Fisheries Minister Susi Pudjiastuti will also to draw investment from Russia. Russia has recently announced its readiness to invest in various projects in East Kalimantan with a total worth of US$5.48 billion.

The projects include a 203 kilometer railway connecting Kariangau and Buluminung industrial areas, a 195 km railway from Tabang to Maloy special economic zone, fast patrol vessels, a pellet factory, fiberglass pipes, a biomass power plant, refineries, Kamaz truck assembly and service centers, solar panels and a brown coal upgrading facility. (dan)(+)

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