$3 billion WIEF Investment Falls Short of Goal
Indonesia’s high hopes of netting a hefty investment package at the much-awaited fifth World Islamic Economic Forum were sobered on Monday with conference organizers announcing oil-rich Middle Eastern countries were only bringing $3 billion in potential investments to the table, well short of the $5 billion expected.
The Finance Ministry has forecast that because of the global liquidity shortage, foreign direct investment growth could drop to 5.9 percent this year from an earlier estimate of 7.5 percent.
Tanri Abeng, the forum’s co-chairman, said in early February that several investors were ready to pump more than $5 billion in Indonesia. However, Sofyan Djalil, state-owned enterprises minister and also the co-chairman of the 5th WIEF, said in his speech on Monday that, “Indonesia signed four memorandum agreements with several Middle Eastern investors worth around $3 billion.”
Among the new agreements, PT Garuda Indonesia, the state-owned carrier, inked a deal to lease eight new Boeing 737-800NG worth around $360 million from Dubai Aerospace Enterprises Capital, a subsidiary of DAE Group.
Representatives from East Kalimantan Province and its East Kutai district also signed an agreement with United Arab Emirates-based Ras Al Khaimah Investment Authority and its subsidiary RAK Mineral and Metal Investments to invest in a 125-kilometer coal railway and an international port worth around $1 billion. The railway will transport coal and crude palm oil from to Balikpapan, the provincial capital. RAKMMI expects the project to be finished by 2012.
PT Pertamina, the state oil and gas company, signed an agreement with Dubai-based ETA Star Petro Energy and Japan’s Itochu Corp. worth around $1.7 billion to upgrade its Balikpapan refinery in East Kalimantan.
Abdullah bin Hamad Al-Attiyah, deputy prime minister of Qatar, said the global crisis had left Islamic countries with less to invest in Indonesia. “These countries are also suffering from the crisis although in different ways,” he said.
Meanwhile, Khaled M. Al-Aboodi, chief executive of the Islamic Development Bank, told the Jakarta Globe on Monday that in order to attract more Middle Eastern investors and to open trade lines to the region, Indonesia should participate in more investment road shows and trade expos.
Admitting the figures were not as high as had anticipated, Sofyan said the government hoped that there would be a snowball effect from the forum, which would boost investment this year and eventually reach the $5 billion total.
He noted that negotiations were underway between the local governments and PT Pelindo II, the state-owned seaport operator that runs a port at Tanjung Api-Api with Ras Al Khaimah, to build a new terminal in Tanjung Api-Api, South Sumatra Province, worth around $4 billion.
“If the negotiation can be concluded as soon as possible, we could still meet our $5 billion target,” he said.
But Abdullah Syaifuddin, Pelindo’s president director, told the Jakarta Globe on the sidelines of the conference that the negotiation were still only in the early stages. “They are currently only making a feasibility study,” he said.
The Finance Ministry has forecast that because of the global liquidity shortage, foreign direct investment growth could drop to 5.9 percent this year from an earlier estimate of 7.5 percent.
Tanri Abeng, the forum’s co-chairman, said in early February that several investors were ready to pump more than $5 billion in Indonesia. However, Sofyan Djalil, state-owned enterprises minister and also the co-chairman of the 5th WIEF, said in his speech on Monday that, “Indonesia signed four memorandum agreements with several Middle Eastern investors worth around $3 billion.”
Among the new agreements, PT Garuda Indonesia, the state-owned carrier, inked a deal to lease eight new Boeing 737-800NG worth around $360 million from Dubai Aerospace Enterprises Capital, a subsidiary of DAE Group.
Representatives from East Kalimantan Province and its East Kutai district also signed an agreement with United Arab Emirates-based Ras Al Khaimah Investment Authority and its subsidiary RAK Mineral and Metal Investments to invest in a 125-kilometer coal railway and an international port worth around $1 billion. The railway will transport coal and crude palm oil from to Balikpapan, the provincial capital. RAKMMI expects the project to be finished by 2012.
PT Pertamina, the state oil and gas company, signed an agreement with Dubai-based ETA Star Petro Energy and Japan’s Itochu Corp. worth around $1.7 billion to upgrade its Balikpapan refinery in East Kalimantan.
Abdullah bin Hamad Al-Attiyah, deputy prime minister of Qatar, said the global crisis had left Islamic countries with less to invest in Indonesia. “These countries are also suffering from the crisis although in different ways,” he said.
Meanwhile, Khaled M. Al-Aboodi, chief executive of the Islamic Development Bank, told the Jakarta Globe on Monday that in order to attract more Middle Eastern investors and to open trade lines to the region, Indonesia should participate in more investment road shows and trade expos.
Admitting the figures were not as high as had anticipated, Sofyan said the government hoped that there would be a snowball effect from the forum, which would boost investment this year and eventually reach the $5 billion total.
He noted that negotiations were underway between the local governments and PT Pelindo II, the state-owned seaport operator that runs a port at Tanjung Api-Api with Ras Al Khaimah, to build a new terminal in Tanjung Api-Api, South Sumatra Province, worth around $4 billion.
“If the negotiation can be concluded as soon as possible, we could still meet our $5 billion target,” he said.
But Abdullah Syaifuddin, Pelindo’s president director, told the Jakarta Globe on the sidelines of the conference that the negotiation were still only in the early stages. “They are currently only making a feasibility study,” he said.