JAKARTA (TheInsiderStories) - Indonesia Investment Club eyes Rp10 trillion (US$757.58 billion) tourism business in 2016 – 2017 through financing scheme such as Real Estate Investment Trusts (REITs), equity, bonds and other instruments.
The agreement between Financial Service Agency (OJK) and Mniiste of Tourism to explore the projects to finance has signed on April 19. Chairman of OJK Muliaman Hadad, said IIC has the capacity to invest in the financial market and infrastructure projects for up to Rp600 trillion in 2016 to 2019.
Dumoly F Pardede, Deputy Commissioner of Non-Bank Financial Institutions of OJK adding, beside prepared investment mulifinance companies shown their commitment to lease furniture and electronics stuff for one to three star hotel with amount around Rp2 billion to Rp10 billion each to support the tourism business.
For that, He continued, Indonesia Hotel and Restaurant Association will sign the agreement with leasing company on April 20.
According to Minister of Tourism Arief Yahya, Indonesia has 10 priorities tourism development, among them are Lake Toba in North Sumatra, Mandalika Resort in West Nusa Tenggara, Morotai in North Maluku, Tanjung Lesung in Banten, Labuan Bajo in East Nusa Tenggara, Thousand Islands in Jakarta, Wakatobi in Southeast Sulawesi, Belitung Islands, and Borobudur in Central Java and Bromo Tengger Semeru in East Java.
The development of the new tourism destination is targeted to boost the country’s foreign exchange revenues to $20 billion in the next five years from the current amount of $10 billion.
To achieve that goal, the government implemented a number of strategies including plans to increase the number of visa-free countries. Indonesia has provided visa-free entry for the tourists from 90 countries.
The Government is optimistic to boost foreign tourist visit up to 12 million peoples in this year froma 2015 recorded 10 million visitors.
Moreover, the Government also provided a facility to the foreign tourists to enter Indonesian territory by using cruise ship or yacht. Minister of Tourism targets of 3,000 yachts will enter Indonesian territory in this year and expect there will be 5,000 yacht entering Indonesia and give $500 million of foreign exchanges by 2019.
OJK create IIC to help medium and long-term investment in the country and role to bridge the demand and supply side in infrastructure projects, capital market, bond market and other financial instruments.
Member of IIC are pension funds, insurance firms, non-bank financial institutions and associations. At the end of 2015, total assets of non-bank financial institutions in Indonesia recorded around Rp 1,700 trillion.
Indonesia government needs investment up to Rp 5,519 trillion to develop various infrastructure projects in the next five years and half of the funds are expected to come from private sector or investors.
In addition to IIC, the government plans to establish National Development Bank (LPPI) to help medium and long-term infrastructure projects. The bill as legal basis for the establishment of LLPI will be submitted to the Parliament in 2016 and is expected to start operation in early 2017.