The Indo-Indonesian Economic Forum (IEEE), a partnership of Indonesian companies and indigenous companies, will invest $1 billion to promote cooperation in India.
“Indonesia and Indonesia have long been at loggerheads, and it is our hope that this cooperation will help us to address issues that we are facing in our region, such as food insecurity, environmental degradation and poverty,” said Nadiya Agasan, the chairwoman of the IEEE.
The two countries are developing an economic zone and a tourism corridor, among other projects.
The partnership is aimed at bringing more Indian companies and their workers to Indonesia, a country of 7.6 million people and one of the fastest-growing economies in the world.
Indonesia is also looking to invest in its energy sector, which is facing increasing pressure from China over the construction of new coal-fired power plants in its territory.
In 2014, Indonesia signed a $1.1 billion contract to build the world’s largest liquefied natural gas (LNG) terminal at Gwadar, near Gwadars in the Indian Ocean.
In 2018, the government in Jakarta signed a deal to build a liquefaction plant at the Gwadagoye coal-processing complex in the province of Lombok, which will generate enough electricity to power 2.5 million homes.
A liquefactions plant in Lombok will produce liquefy gas for export to China.
In addition, Indonesia is a major investor in the South-East Asian Infrastructure Investment Bank, a private entity created in 2011 to provide loans to developing countries to develop infrastructure projects in their regions.
“We are also working on projects with the Indonesian companies to build our energy industry,” Agasans comments.
Indonesia also has an active business relationship with the Philippines.
Last year, the Indonesian government announced $500 million in investment in a new power station at the Benguet port in the southern Philippines.
The Philippine government has been trying to build its own liquefying plant, which has been stalled by environmental and technical hurdles.
Indonesia has also made a concerted push to develop energy infrastructure in the Philippines, such that it could provide electricity to about half of the population.
“The Indonesian companies are very committed to our efforts to promote economic development and development in the region and the Philippines is an important partner for Indonesia,” said Ivo Bautista, the president of the Indonesian Chamber of Commerce.
Indonesia will invest in projects to help the Philippines develop its economy, and will also work with the Philippine government on a partnership with the Ministry of Science and Technology to develop an energy infrastructure project in Indonesia.
Indonesian companies have been investing in the country for decades, but the development of the country’s electricity sector has come at a time of political instability in Indonesia and in Indonesia itself.
A crackdown on dissent in the Muslim-majority country is fueling discontent among Indonesians, and they are increasingly frustrated with the country being unable to develop its own industries, such a mining and manufacturing industry.
In 2017, Indonesia launched a nationwide survey of 1,000 companies to determine whether they are “too dependent” on foreign investment.
About half the respondents said they have already stopped doing business with foreign companies because of the crackdown on protests and civil liberties.
Indonesian President Joko Widodo has promised to crack down on companies that are too dependent on foreign capital.
Indonesia and the United States have been working to expand their economic ties, especially with regards to defense, technology and infrastructure, which are key pillars of the bilateral relationship.
The United States is investing in a $600 million infrastructure investment fund, which also includes a $300 million development loan for the Bali-Bangkok corridor, Indonesia’s largest railway project.
In 2019, the United Kingdom also approved $300 billion in aid to Indonesia.