(MENAFN- Gulf Times) In its quest for wooing more desperately needed investors into the country to breathe new life into a weakening economy and support the sliding rupiah, Indonesia has stepped up stimulus measures to make the country "as attractive as possible for investors," as Coordinating Economic Minister Darmin Nasution puts it, emphasising that investing in Indonesia must be "simplified and made cheaper."
Special sight has been set on Middle East countries, particularly after Indonesia President Joko Widodo's state visit to Gulf Cooperation Council (GCC) nations, including Qatar, last month.
New investment incentives introduced include fast-track licensing for investors intending to open a factory with a minimum investment of 100bn rupiah ($7.47mn). From October 26, they will be able to obtain the required investment permit in just three hours. Similarly, licences in the agriculture sector in the future will also be issued quickly, the Indonesian Investment Coordination Board (BKPM) said, adding that the time for processing more extensive permits for mining and geothermal projects in forested areas will be cut from up to four years to about 15 days.
The new incentives are part of a second package after a first stimulus bundle earlier this year that included tax breaks and attempts to simplify confusing regulations seen as a drag on business. Together, they are also attempts to improve Indonesia's rather dismal standing in the World Bank's latest global Ease of Doing Business ranking were the country occupies place 114 on a list of 189, behind nations such as Zambia, Ecuador or Nepal.
The BKPM said that, in principle, investment from Middle Eastern countries has been growing in the past, but it was still at a small value level when compared with investment coming from richer countries in the region, such as Japan and South Korea.
"We hope that President Jokowi's visit to the GCC will attract investors' interest to Indonesia," said BKPM chief Franky Sibarani, adding that he already noticed an increase in investment permit applications from the Middle East compared with the year before.
According to BKPM data, Middle East investments between 2010 to the end of the first half of 2015 were $440mn outside the oil and gas sectors. For example, Qatar has two investments in Indonesia, which are telecom company Ooredoo's majority stake in Indosat, one of the largest Indonesian telecom companies, and the majority stake of Qatar National Bank (QNB) in investment bank Bank Kesawan which it recently renamed QNB Indonesia. A few years ago, Qatar also launched an investment fund valued at $1bn targeting the mining business and infrastructure projects in Indonesia. Projects are still under evaluation, though.
"The investment interest of Middle Eastern countries are actually in line with our priorities, such as the property sector, development of special economic and industrial zones, oil and gas and mineral processing industries, tourism zone development and renewable energy sources including geothermal, water, solar and biomass," Sibarani said.
It its development masterplan up to 2025, the Indonesia government has defined six main economic corridors as growth centres, namely in Java, Sumatra, Kalimantan, Sulawesi, Bali and Papua. To these destinations it is hoping to attract more Middle East investors in the future, particularly in the natural resources and energy sectors.
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