Indonesia-Singapore to Boost Cooperation in Economic-Related Field

Indonesia's Investment Coordinating Board Chairman Thomas Lembong met Singaporean business delegation in Jakarta. (The Insider Stories/Muna)

JAKARTA (TheInsiderStories)— The second meeting of Indonesia-Singapore Business Council that was held in Jakarta on Thursday (05/05) resulted in commitments from investors from the two Southeast Asian countries to enhance collaborations in the capital markets, digital economy, tourism, and infrastructure.

On this day, business delegation from the city-state nation came to Indonesia’s capital to discuss potential business with Indonesian counterparts in a meeting that was organized by Indonesia’s Investment Coordinating Board (BKPM), the Indonesian Chamber of Commerce and Industry (KADIN), in collaboration with the Economic Development Board of Singapore and Singapore Business Federation.

“Indonesia can gain benefit from Singapore that widely known as a financial hub in Asia to attract investment for financing tourism and digital economy projects,” BKPM Chairman Thomas Lembong said in a press conference on Thursday (05/05).

He expected the meeting could serve as a platform for investors from both countries to explore business opportunities.

Singapore is the largest investor by country of origin in Indonesia, having invested US$39 billion in 2012-2017 period, according to BKPM data. However, investment from the city state nation declined to $8.4 billion last year from $9.1 billion in 2016.

Singaporean investors largely put their money in the transportation, warehousing, telecommunication, and pulp industries in Indonesia. The investment was spread nearly even with 51% in Java and 49% outside of Java.

Incentives in capital markets

Indonesia’s government has made efforts to lure investors into the country’s capital markets. The Ministry of Finance, for example, plans to offer offer a tax cut for up to 10 years for venture capital firms that are investing from Rp 500 billion to Rp 1 trillion in the country. Data from the Financial Service Authority shows that as of December 2017, there are 67 venture capital firms in Indonesia, which register a total assets of around Rp 11 trillion.

Indonesia also has issued a regulation that offer incentives for investors in the fixed income markets for companies that issue bonds to fund environmentally-friendly projects. This debt papers are called green-bond.

Tourism & Infrastructure

In tourism sectors, Indonesia sets a target to attract a total of 20 million foreign tourists to visit the country by 2019. As part of an effort to meet this target, the government is seeking to bring US$20 billion worth of investment in the sector and revitalize its ten priority tourism destinations. About half of this figure is needed to develop the country’s ailing infrastructure, roads, ports, airports, and electricity.

National Development Planning Minister Bambang Brodjonegoro had said that Indonesia is offering 10 infrastructure project priority in 2018 to the local and foreign investors. The ten projects are waste management project, toll roads, water supply facility, bridge, and a hospital.