Indonesia will try to lure Middle Eastern investors to put their money to work in Southeast Asia’s largest economy during the fifth World Islamic Economic Forum, or WIEF, being held in Jakarta from Monday through Tuesday.
“The WIEF is an opportunity for us to show [Middle Eastern investors] that we have strong fundamentals and are an attractive place to invest,” Erwin Aksa, chairman of the Association of Young Indonesian Businessmen, or Hipmi, said at a WIEF press conference on Sunday.
Earlier, Tanri Abeng, the forum’s co-chairman, said that several investors from Abu Dhabi and Dubai were prepared to make investments worth more than $5 billion in Indonesia’s oil and mining industries.
Indonesia’s largest bank, PT Bank Mandiri Tbk, is also hard at work preparing to facilitate investments by Middle Eastern parties, helping them find strategic partners or even set up businesses locally.
“It is up to them. If they are interested in investing in resource-based sectors, we are ready to help them,” Abdul Rachman, Bank Mandiri’s director, said on Sunday. “We have a broad range of customers in various sectors, including resources and manufacturing, upstream and downstream. Our clients are also the biggest players in their industries.”
Abdul noted that many Middle Eastern businesses had been making moves into Western countries, which are now in dire straits due to the economic crisis. He said that developing countries might now prove better places in which to grow.
Erwin, however, warned that it would not be so easy to attract money from the oil-rich Gulf states and other nations, suggesting that companies there currently prefer to hold off on new commitments because of the crisis. He said Indonesia should try to create the perception among WIEF attendees that the country is welcoming, stable and ripe for investment.
“This forum is also an opportunity for us,” he said. “ And don't forget that we are not the only ones who are trying to lure Middle Eastern investors.”
Dato Sri Nazir Razak, chairman of the WIEF, said the current economic downturn would only worsen if countries adopt protectionist positions and distrust one another, and he expressed hope that the forum would help rebuild trust and trade between Muslim-populated nations.
“The crisis is an opportunity for us to claim a bigger voice in the global economic system because Muslim countries have financial strength and healthy fundamentals,” he said.
In his pre-session remarks, Vice President Jusuf Kalla said that Islamic economics based on transactions backed by real assets had survived the financial crash.
“Countries that grounded their economies on real transactions were not so badly affected compared with those who had economic bubbles.”
The primary areas of focus for the WIEF, to be opened by President Susilo Bambang Yudhoyono on Monday, will be food, energy and financial security.
Several foreign dignitaries are expected to attend, including the heads of state of Malaysia, Qatar, Morocco and the United Arab Emirates. Ahmed Mohamed Ali, president of the Islamic Development Bank, and other business and institutional representatives are also expected to speak.