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Development of Industrial Area Needs Global Investor

Minister for State Owned Enterprises (SOEs) Rini Soemarno assesses the need to invite investors from abroad in order to establish cooperation in financing the construction of infrastructure in Indonesia that has been planned around Rp 5,000 trillion. These investors need to be attracted due to large funding is unlikely to be sourced from within the country.

"It is impossible to get such huge funds from within our own country, that means we need to invite investors from abroad," said Rini Soemarno.

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She also explained that the entire infrastructure, including energy, transport and welfare and other sectors that are integrated with each other. Therefore, Rini said all ministers have been given special responsibility to invite investors from various continents and certain countries in accordance with their respective fields.

Similarly, Deputy Chairman of KADIN for Industry, Johnny Darmawan expects the Government can encourage the growth of private sectors and global investor partnerships to accelerate the development of industrial estates development in Indonesia.

“One of which with a Public Private Partnership (PPP) scheme, to accelerate development of industrial zones, both which are included in the development of 14 Industrial zones program, as well as the development of other industrial zones,” said Johnny.

According to him, there are some points that need to be improved. The Government shall continue to find solutions, for instance through deregulation and debirocration to facilitate global investors or SOE that want to invest.

Johnny hopes the Government fully supports if there is any global investors that can help the government in actualizing its vision in developing industrial areas and at the same time building new industrial cities that can integrate economic and social development.

According to him, these new industrial cities must be environmentally friendly and developed in a holistical approach, taking into consideration of local potential for commercial development, residential areas, connectivity of transportation infrastructures, and the application of technology, investors that would become government's partner are also expected to help attract more investors and anchor industries alike (investment gateway), for example by bringing in tenants and other investors from global companies to the industrial areas.

"It would be better if investors are able to develop High-Tech Eco Industrial City for value-added industries, such as high-tech manufacturing industry, e-commerce, biotechnology, and are also able to build transportation infrastructure that will establish connectivity between industrial areas and residential areas." he said.

According to him, the government needs to support global investors that are able to provide solutions to drive industry growth by integrating global resources and local economic development for an local area that can grow to a thriving industrial cities. "They can be a good partner to develop an integrated industrial areas," said Johnny.

Previously, the Director General of Industrial Development Zone and Planning, Ministry of Industry, Imam Haryono said that priority infrastructure development, especially outside Java, which becomes Ministry of Industry program, needs support especially due to industrial zone administrators's difficulty in embracing anchor industries.

"Inevitably, the involvement of global investors is very important, considering the need for infrastructure development capital for the development of industrial zones is fairly high (capital intensive)," said Imam at a seminar themed Priority Infrastructure Development and Ease of Investment in The Development of Economic Zones.

In addition, the Government also needs financial support from the private sector due to the State Budget (APBN) will not be enough to cover all strategic and development projects initiated by the government.