Vladivostok, Russia. President Susilo Bambang Yudhoyono called on host nation Russia and other members of the Asia-Pacific Economic Cooperation forum to invest in Indonesia’s planned infrastructure projects valued at $500 billion, saying that such financing will come under a public-private partnership scheme that will be in force until 2025.
He made the appeal as heads of state assembled for the first day of the APEC forum here on Saturday. The president used the meeting to explain the government’s Master Plan for the Acceleration and Expansion of Economic Development (MP3EI), which aims to boost growth across the country. To realize this, Indonesia would need huge investments, particularly in infrastructure for the construction of projects such as airports, roads, railways, seaports and electricity-generating plants.
“In the years and decades ahead, we are embarking on a massive development initiative,” Yudhoyono said. “We project that this master plan will require some $500 billion of domestic and foreign investment.”
He urged investors to take a look at Indonesia, which has Southeast Asia’s biggest economy, a population of more than 240 million people, abundant natural resources and a rapidly growing middle class.
“On one hand, Indonesia will benefit from your investments and collaboration. On the other hand, your investment and returns will also grow,” the Indonesian leader said.
The country expects to have at least $20 billion in foreign direct investment this year, and Yudhoyono said this figure will soar in the years ahead as Indonesia increases its investment appeal in many ways, including better laws and efficient policy implementation. FDI in Indonesia rose 18 percent to Rp 175.3 trillion ($18.3 billion) in 2011.
Yudhoyono added that Indonesia’s economy is already the 15th largest in the world with gross domestic product at more than $1 trillion, helped by purchasing power parity, and the fact that half of its population of 240 million comprised of people at a productive age.
The economy grew 6.5 percent last year— the fastest since 1996 — helped by low borrowing costs that are encouraging Indonesians to spend. Domestic consumption represents about 60 percent of the nation’s economic activity.
In his speech titled “Resilient Asia-Pacific: The Engine of Global Growth,” the president said that further development of Indonesia’s infrastructure will enhance connectivity among members of the Association of Southeast Asian nations, which in turn will bolster economic growth in the rest of the Asia-Pacific region and the world as a whole. This can become reality when all APEC members cooperate more closely, Yudhoyono noted.
Russian Ambassador to Indonesia Alexander Ivanov told the Jakarta Globe last month that Russian interest in Southeast Asia remains strong. Investment plans include a $2.5 billion railway project in Central Kalimantan, and Russian companies are keen to build smelters for processing minerals, he said.
Yudhyono also discussed the need to overcome the problem of declining exports affecting APEC member economies, and said that a better balanced trade between developed and developing economies would be a good solution.
Indonesia will host the APEC summit in Bali in October next year, the president said: “So, we are waiting for businesses in APEC to cooperate with us in developing infrastructure according to our master plan.”
Established in 1989, APEC includes member economies Australia, Indonesia, Singapore, Malaysia, the Philippines, Brunei, Thailand, Vietnam, South Korea, China, Hong Kong, Japan, Papua New Guinea, New Zealand, the United States, Chile, Canada, Mexico, Peru and Russia.
The group accounts for 50 percent of the global economy and its nations make up two-thirds of the planet’s population.
All APEC leaders were in attendance except for US President Barack Obama, who was busy with his re-election campaign, and Australian Prime Minister Julia Gillard, who departed early on Saturday due to the death of her father.
In a joint statement issued on Saturday, APEC ministers declared that they would cooperate to promote “increased growth and prosperity in the Asia-Pacific region amid continued global economic uncertainty.”
The ministers agreed that the Asia-Pacific region would continue to serve as a major engine for the world economy and key driver for international trade and investment.
The joint statement outlines policy initiatives based on leaders’ assessment of progress in advancing APEC’s 2012 priorities. These include trade and investment liberalization, regional economic integration, strengthening food security, establishing reliable supply chains and intensive cooperation to foster innovative growth. China, the Philippines and Peru will host APEC in 2014, 2015 and 2016, respectively.