During the 2018 IMF – World Bank Annual Meetings in Bali, October 8-14, the Indonesia Investment Coordinating Board (BKPM) has partnered with several institutions in its efforts to find the best investment solution to investors, as BKPM continuously pushes for the country’s investment climate conduciveness. BKPM came with two parallel events, namely BKPM - HSBC Infrastructure Forum and Bloomberg Modern Markets.
BKPM - HSBC Infrastructure Forum
In the first parallel event, BKPM partnered with PT Bank HSBC Indonesia held the Infrastructure Forum at Ayana Hotel & Resort, Jimbaran, Bali. The forum acts as a medium to encourage infrastructure project developments in Indonesia, in accordance with the Indonesian government’s vision which was to have the country as the fourth largest economy in the world by 2045.
The event was attended by more than 400 participants ranging from investors, corporate banking clients, private banking consumers, to fund management companies. It features two discussion panels with speakers from the government sector, business owners, as well as academics.
The first panel of Infrastructure Forum was titled ‘Towards Indonesia 2045’ which presented Bank Indonesia Deputy Governor Sugeng, Chief Executive of the Capital Market Supervisor in Financial Services Authority (OJK) Hoesen as well as an Economist and the Former Indonesian Minister of Finance Chatib Basri. The second panel entitled ‘Realising Indonesia’s Growth Ambition’ which presented Pelindo II President Director Elvyn G. Masassya, Head of Infrastructure Advisory Global Transport and Logistic Industry Leader Price Waterhouse Coopers (PwC) Indonesia Julian Smith, Director of Project Development and Consulting Services at PT Sarana Multi Infrastruktur Darwin Trisna Djajawinata and Chief Financial Official of Power China International Ltd. Tianfu Yang.
Aside from the panels, a High Tea Event between Chairman of BKPM Thomas Lembong and 10 companies from various countries such as China, Hong Kong, the Netherlands, and Malaysia was held, with combined investments worth US$31.4 billion on infrastructure sectors comprising power plant, sea port, construction and logistic.
Mr Lembong conveyed Presiden Joko Widodo’s directives, which was to urge for strong consolidation and coordination between monetary, fiscal and business sectors in order to achieve national development.
“This Infrastructure Forum is a communication forum between the government and investors, local and foreign, from infrastructure, finance and banking sectors, regarding development opportunities for the infrastructure sector in Indonesia, as well as on recent updates in infrastructure financing schemes,” said Mr. Lembong.
Infrastructure development, he continued, also needs to be linked with disaster preparedness. Especially since Indonesia is located in disaster prone area. Recent earthquakes in West Nusa Tenggara and Central Sulawesi have made significant damage to vital infrastructures such as airports, harbors, electric transformers, and communication towers.
“Please optimize this forum to discuss strategies for better and more disaster-resilient infrastructure development. In addition to that, financially speaking, how we can implement disaster risk management and other financial innovations towards disaster preparedness,” Mr. Lembong said.
Considering the importance for private sectors to play a greater role in boosting infrastructure project developments in Indonesia, Deputy Chairman and Chief Executive of HSBC Asia Pacific Peter Wong said that the country not only has a large population, but also potentials that are ready to be explored and utilized. However, there needs to be a connector, whether it’s physical, economical, or financial. “In other words, infrastructure is key,” Mr. Wong said.
President Director of PT Bank HSBC Indonesia Sumit Dutta said that in order to realize Indonesia’s infrastructure development plan, the government and private sector needs a good and effective financing scheme in order to support future sustainable infrastructure project developments. One of the schemes was through investments in infrastructure development projects. According to the Asian Development Bank (ADB), Asia needs an estimated US$22.6 trillion in investments for infrastructure for the years 2016-2030, or around US$1.5 trillion per year.
Taking into account disaster mitigation as well as increasing adaptation cost, the numbers could go up to US$26.2 trillion or US$1.7 trillion per year. For Southeast Asia, within the same period, the estimated infrastructure investment was projected at US$2.7 trillion. With considerations to disaster mitigation and adaptation cost, the investment needed would rise to US$3.1 trillion.
Bloomberg Modern Markets
The second parallel event was Bloomberg Modern Markets, which was held in Conrad Hotel, Bali, in collaboration with Bloomberg and Standard Chartered Bank Indonesia . The forum discussed a number of efforts to align government policies with businesses and innovation technology to create the best investment climate that is attractive to investors.
Developing countries have a lot of investment potentials, but often hampered by various problems. There have been many investors who have injected substantial amount of funds in recent years, but the recent economic uncertainties have evoked doubt over the country’s investment climate.
Panel discussions and interview topics include:
• Interview with Group Chairman, Standard Chartered PLC, José Viñals, discussing trade, risk, global growth and commitment to the emerging markets
• Global Trade War: how tensions between the two countries with the largest economies in the world can affect global trade
• Live without cash with GoPay
• New Financial Routes for Infrastructure
• Markets for Everyone - Making financial markets more accessible to more people
Chairman of BKPM Thomas Lembong said that Indonesian economy is transforming to support the government-initiated “Indonesia 4.0” movement. And the country is offering a lot of opportunities for global investors.
“We are happy to partner with Bloomberg and Standard Chartered Bank to discuss future prospects for the country and its resiliency against economic challenges. As a country with the biggest economy in ASEAN and fourth largest population in the world, Indonesia represents all the challenges and opportunities in Southeast Asia, as well as other developing countries and markets. Our population is still young and gadget-friendly, which is reflected with the increasing popularity of digital economy as well as trending tourism and lifestyle industry,” he said.
Mr Lembong asserted that part of the government’s strategy in engaging modern market and economy was to shift the focus from traditional sectors to digital economy.
“Before, mining and commodity are Indonesia’s economic drivers. Now, Indonesia has moved forward with digital economy, tourism industry, and lifestyle industry. These sectors are viewed to be more sustainable, more environmental friendly, stable, and inclusive economic drivers. Currently, investments also drive the Indonesian economy,” he explained.
CEO of Standard Chartered Bank Indonesia Rino Donosepoetro expressed his gratitude to be involved in the prestigious event, as well as being partnered with BKPM and Bloomberg.
“As Indonesia’s oldest bank, we continue to play an active role in supporting government’s efforts to push the country’s economic growth as well as the people’s welfare. We partnered with BKPM since last year as part of a strategy to promote foreign direct investment into the country,” he said.