INDONESIA KEEN TO SEE REALIZATION OF CHINESE INVESTMENT COMMITMENTS by Fardah

    Jakarta, May 30, 2015 (Antara) - Joko Widodo (Jokowi) has visited China twice since becoming Indonesia's president in October 2014, indicating his serious intention to establish closer ties, politically and economically, with the world's most populated nation.

        During Jokowi's second visit to China in March 2015, Indonesia received a total investment commitment of US$68.44 billion, primarily for funding in the infrastructure and fisheries sectors.

       The meetings between President Jokowi and his Chinese counterpart, Xi Jinping, have helped enhance investment growth in the two countries, said China Investment Promotion Agency (CIPA)'s Deputy Director Yang Yihang when visiting Jakarta in April 2015.

       Yang met the Coordinating Board for Investment (BKPM) to discuss the situation in Indonesia, as well as investment-related regulations. He promised to forward the information to Chinese investors.

       On May 27, 2015, President Jokowi received Chinese Deputy Prime Minister Liu Yandong, who was on a five-day visit to Indonesia.

       During their meeting, Jokowi asked China to fulfill its investment commitments.

       "The president has asked for immediate execution of the plans. China must accelerate the investment projects," Minister-State Secretary Pratikno said, after accompanying Jokowi in the meeting.

        Also, when BKPM Chief Franky Sibarani organized a business forum with Chinese investors in Beijing on May 14, 2015, he received investment commitments worth US$16.7 billion
   At least five Chinese investors plan to invest in Indonesia, the BKPM chief noted in a recent statement.

        Of the US$16.7 billion commitment, investors have sought principle permits for projects valued at US$700 million and have earmarked $16 billion for exploring projects in the energy, mining, and infrastructure sectors, as well as the processing and automotive industries.

        BKPM has planned to open a representative office in China to boost Chinese investments in Indonesia, which are currently relatively small.

        Between 2005 and 2014, only US$1.80 billion, or seven percent of Chinese investment proposals worth US$24.27 billion, were carried out in Indonesia, according to Sibarani.

        Of note, in the last five years, 23 percent of Chinese investments in Indonesia were in the electricity, water and gas sectors, 21 percent in the mining sector, and 16 percent in the metal, machinery, and electronics industries.

        "In terms of regions, 52 percent of Chinese investment is found outside Java. We hope that more Chinese investors will invest in areas outside Java, particularly in the eastern part of Indonesia," he added.

        Sibarani remarked that China has immense investment potential, and that the BKPM has been proactive in showcasing Indonesia's potential areas of investment to Chinese investors.

        The government has also offered facilities to Chinese investors, and held routine market soundings and business forums for them.

        He pointed out that the lack of knowledge among Chinese investors regarding potential areas of investment in Indonesia was the reason behind the low realization of the Chinese fulfilling commitments in the country.

         "They (Chinese investors) also have inadequate knowledge about investment rulings and mechanisms in Indonesia. By setting up this representative office, we hope that we can inform them about all potential areas of investment in Indonesia," he remarked.

         BKPM Marketing Coordinator for China M. Harri Santoso explained that the representative office will employ two staff members tasked with providing Chinese investors with the latest information on Indonesia and its potential areas for investment.

        Currently, the BKPM has eight representative offices abroad, including in Singapore, the United States, Australia, and Japan.

   
Investment in Infrastructure     
   The Indonesian government under President Joko Widodo's leadership has set as a priority the development of the nation¿s infrastructure to achieve 7 to 8 percent economic growth by 2017-2019.

         Indonesia plans to build several infrastructure facilities in the next five years, such as 1,000 kilometers of toll roads, 3,200 kilometers of railway networks, 15 airports, 24 seaports, eight special economic zones, 14 industrial areas, and power generators with a capacity of 35 gigawatts.       
   Also, the Indonesian Embassy in China and BKPM recently promoted several infrastructure development projects to Chinese investors in Beijing.

         Indonesia needs support and assistance from Chinese investors to develop infrastructure, according to Indonesian Ambassador to China Soegeng Rahardjo.

        Moreover, Chinese President Xi Jinping and Prime Minister Li Keqiang have vowed to assist infrastructural development in Indonesia.

          Chinese investments in Indonesia have progressed significantly, as was evident in the first quarter of 2015 when China was ranked the tenth largest investor in Indonesia, after previously being in the 12th position.

        The government, however, has tightened conditions of cooperation in infrastructure projects with China to prevent a repeat of delays in implementing projects, such as those concerning the Fast Track Program (FTP) in power infrastructure.

         Additionally, the improvement of conditions of cooperation in  infrastructure projects with China had been agreed upon at a recent meeting between the leaders of the two countries, said Minister for National Development planning/head of the National Development Planning Board (Bappenas)  Andrinof Chaniago, referring to a meeting between Jokowi and President Xi Jinping, on the sidelines of the commemorative meeting of Asia-Africa Conference held in Jakarta, April 2015.

         "We have improved the conditions to prevent long delays in carrying out projects, and to guarantee adequate quality," Adrinof noted recently.

          In talks with Xi Jinping, Jokowi sought confirmation of Chinese involvement in the construction of 24 seaports, 15 airports, 1,000 kilometers of roads, 8,700 kilometers of railway tracks and power plants with a total capacity of 35,000 megawatts.

          China is also expected to take part in the development of fast trains serving the Jakarta-Bandung route and Jakarta - Surabaya track. ***3***
(f001/INE/o001) 

(T.F001/A/BESSR/O. Tamindael) 30-05-2015 14:47:32