It was never easy to improve the economy in this trying times but the Minister of Finance Sri Mulyani Indrawati highlighted that there were many reasons behind the government’s decision to set up the Investment Authority of Indonesia, including the need to boost public health and infrastructure.
In order to improve the wellbeing of the Indonesian people, the government needs huge funds, and hence the INA has been established. In addition, Indonesia plans to be among the world’s five strongest countries by 2045, with an expected investment of Rp6,645 trillion required for infrastructure.
It is estimated that the funds will be extracted from the State Budget, BUMN and, she shared it to the Administration, in cooperation with business entities. The characteristics of financing, especially for infrastructure construction, are high-cost and long-term capital intensive, she said.
On the other hand, there has been no rise in the amount of foreign direct investment in Indonesia. Sri Mulyani shared that a number of sovereign investors are still interested in investing in the region, but they need solid and stable legal and institutional strategic partners.
The Indonesian government therefore sees the need for a breakthrough in the development of stable and trustworthy investment partners, one of which, she noted, is the establishment of the INA.
Along with this, More than 10,000 investors will engage in the Mandiri Investment Forum this 2021 on 1-5 February, including 500 foreign investors, embassy members and customers of Bank Mandiri’s foreign offices managing assets of approximately US$4 trillion. The Bank Mandiri, in partnership with Mandiri Sekuritas and sponsored by the Investment Organizing Board, will coordinate the conference.
Irawan stressed the importance of hosting a forum to build synergies between investors, market players and stakeholders so that they can seize investment opportunities that can help improve the economic development of Indonesia.
Consequently, in the second quarter of 2020, the Indonesian economy witnessed the deepest effect of COVID-19, posting an economic downturn of minus 5.32 percent and showing a rebound in the next quarter. This pattern is anticipated to persist this year.