Removing Investment Barriers, Learning from MoUs with Partner Countries

In the 17th century, European merchant ships undertook months-long journeys across oceans to reach the Indonesian archipelago. They did not come out of compassion or friendship, but because this archipelago held something that made the world willing to take great risks: economic value.

The spices of the archipelago were once commodities that helped drive global trade. In the following century, coffee, sugar, tea, rubber, tin, oil, and various products from the Dutch East Indies helped sustain colonial economic power. In the plainest terms, the world has long known one thing: Indonesia is an economically valuable space.

Four centuries later, the world is returning. Not with war fleets, and not with trade monopolies. They arrive bringing capital, technology, investment, and Memorandums of Understanding (MoUs).

The United States, Japan, China, France, the United Arab Emirates, Saudi Arabia, South Korea, Australia, Singapore, Russia, Brazil, India, and various other nations are competing to expand cooperation with Indonesia.

In recent years alone, various MoUs, business deals, joint investment funds, and investment commitments announced have reached a value of nearly US$175 billion. In fact, the actual figure is likely even higher, as not all agreements disclose their commercial value to the public. This value is equivalent to approximately eleven per cent of Indonesia’s current Gross Domestic Product (GDP).