BKPM expects US$10b investment after S&P ugrade, Manado grabs $400m in investment

JAKARTA (TheInsiderStories) – Chairman of the Investment Coordinating Board Thomas Lembong expects up to $10 billion investment in Indonesia in the next two years after ratings agency Standard & Poor’s upgraded Indonesia’s credit rating. The rating agency upgraded Indonesia’s credit rating to investment grade (BBB-) with a stable outlook.

Menawhile, Manado International Conference on Tourism organized by the BKPM and supported by the Ministry of Tourism, North Sulawesi Provincial Government, Pricewaterhouse Coopers, Broadway Malyan and International Research Development Indonesia resulted in a business deal worth $400 million.

The agreement consists of business cooperation, investment cooperation between China and a national private company related to development in South Manado for hotels, apartments, shopping malls and diving center worth $200 million and delivery of investment license to PMA United States related cottage and tourism accommodation at Raja Ampat, Papua worth $200 million.

“The business deal as well as an agreement related to the education is a testament to the government’s efforts to increase investment in the tourism sector,” Lembong said at a press conference Invest Manado at the Sintesa Peninsula Hotel on May 24.

National Development Planning Minister and Head of National Development Planning Agency Bambang Brodjonegoro has said, that the Indonesian government has proposed $28 billion worth of infrastructure projects during to China during the recent Belt & Road Forum (BRF).

The BRF initiative aims to connect Asia and Europe in a vast network of roads, railways, pipelines, airports, sea ports, transnational electrical grids and fiber optic lines of communication through the creation of an economic land belt traversing Central Asia and the Middle East as well as a maritime road that links China with the ports of the Indian Ocean, East Africa and Mediterranean.

Bambang said the Indonesian government has proposed projects close to the South China Sea such as North Sumatera, North Sulawesi and North Kalimantan in areas of tourism, industrial zone and infrastructure projects such as toll roads, ports and airports to support economic development in those areas.

“We have proposed list of projects. The form of cooperation will be B to B. We have proposed investment of US$28 billion, in which US$21 billion for projects in Kuala Tanjung, Sei Manke, LRT as well as other projects in North Sumatera,” Minister Bambang stated.

The remaining investments will be for projects in Bitung and Pal Beach, Likupang, North Sulawesi. The other potential projects are plantation, mini LNG terminal, coal-fired power plants and smelter projects.

While Tourism Minister Arief Yahya explained that North Sulawesi’s special issue of connectivity is important to sustain the growth of the tourism sector.  He added, that the connectivity potential will be huge if it can be capitalized in a joint investment project with China and with investors from other countries.

“For example, cruise ships can be developed from Bali to Mandalika, Labuan Bajo, Wakatobi, Banggai, Toegan, then to Bunaken, then Morotai, Raja Ampat and finally in Tual,” he said.

While the Governor of North Sulawesi Olly Dondokambey as head of the region expressed its readiness to facilitate investors in the tourism sector that will develop tourism destinations in North Sulawesi.

“North Sulawesi with an average economic growth of 6.5% from 2010 to 2016 shows that the economy of North Sulawesi is very prospective and attractive for both foreign and domestic investment,” he said.

From the BKPM data, foreign investment in the tourism sector continues to increase from year to year. In 2014, investments in the tourism sector only $673.1 million rose slightly to $732.5 million in 2015, rising drastically 63 percent to $1.19 billion in 2016. Until the first quarter of 2017, foreign investment in the sector tourism reached $440 million. (*)