The United States International Development Finance Corporation (IDFC) signed on Nov. 19 a letter of interest to invest US$2 billion in Indonesia’s sovereign wealth fund known as the Indonesia Investment Authority. IDFC chief executive officer Adam Boehler signed the letter witnessed by Coordinating Maritime Affairs and Investment Minister Luhut Binsar Panjaitan during the latter's visit to the US in a bid to strengthen economic ties between the two countries, according to the ministry’s statement as quoted from The Jakarta Post.
This partnership will strengthen economic relations between the United States and Indonesia." The government expects the IDFC’s investment will attract US companies to invest in Indonesia while the corporation will work with its partners in Japan, the United Arab Emirates and Singapore to also invest in the sovereign wealth fund. The government aims to launch its own sovereign wealth fund in January next year as it seeks to attract more investment and support the economy amid the coronavirus pandemic.
The establishment of the sovereign wealth fund is included in the Job Creation Law. The sovereign wealth fund will offer dedicated industry funds in a bid to drum up $15 billion in investment and deepen access to global capital by Southeast Asia’s biggest economy, Reuters reported on Nov. 17, quoting Finance Minister Sri Mulyani Indrawati. The structure has been adopted to entice global investors with various appetites for risk, return and the length of investment.
(source: The Jakarta Post)