Interview: Luhut Pandjaitan
How will the administration continue to encourage further investments in the digital economy?
LUHUT PANDJAITAN: By creating an environment where our tech start-ups can perform well and quickly expand, we have already witnessed the tremendous growth of our digital economy. Alongside the five tech unicorns, we have many companies growing rapidly in sectors such as e-commerce and financial technology. We are happy to support investors who bring advanced technology to the country and facilitate the transfer of knowledge as this will enhance the digital skills of our domestic workforce. We see great potential in emerging industries such as electric vehicles. We are developing a lithium battery project in Morowali, Central Sulawesi. The factory will use 70% raw materials from Indonesia, thereby allowing technologically advanced industry to grow. Alongside this, we have identified the importance of green energy. Indonesia has the potential to develop a total of 33,000 MW of hydropower and 29,000 MW of geothermal energy at costs as low as $0.02-0.04 per KW. Green energy will help us cut down our use of fossil fuels and produce more value-added commodities.
By what means can the potential of Indonesia’s blue economy be realised, while ensuring the sustainability of national maritime resources?
PANDJAITAN: Our beautiful nation is grappling with a serious plastic pollution challenge. We have a pristine natural environment and an abundance of fish reserves. Our booming fishing industry is the second largest in the world. However, this is under threat from rising levels of marine plastic debris. It is estimated that by 2025 there will be at least 800,000 tonnes of plastic in our oceans. To protect our natural wealth and sustainably grow our fishing industries, we are embarking on a full-system overhaul to tackle pollution and waste. We also need to protect our resources for the sake of the tourism industry. As such, we are advocating in favour of responsible cruise liners and diving operations.
In what ways can foreign direct investment and knowledge exchange facilitate the growth of professional and services sectors?
PANDJAITAN: It is very important that all investors are aware that their capital inflows must add value – the Indonesian workforce and people must gain benefits from an investment. One example of this is freeport in West Papua, where the mining and processing of copper, gold and silver is employing and empowering the local population. Investors must also be willing to establish business-to-business partnerships with local companies. Indonesian firms know and understand the economy and can be of great value to any foreign corporation looking to enter the market.
The omnibus laws will allow for reforms to labour, taxation and business, which will increase our attractiveness to foreign investors. We need to remove regulatory roadblocks to ensure that Indonesia reaches its economic goals. Streamlining bureaucracy and simplifying long and complex procedures will generate a big boost for investment. Certain proposed tax relaxations, alongside the attractiveness of the special economic zones, will also attract investors.
Which sources of overseas finance are the most attractive for big-ticket infrastructure projects?
PANDJAITAN: Indonesia is a country that is exceptionally rich in natural resources. We have an abundance of nickel, copper and tin, which are often exported as raw commodities to other countries for processing. It is important for us to build refineries and smelters, which will not only boost export earnings, but also create more jobs. We are willing to partner with investors who can assist us in developing these local industries, while ensuring that Indonesia is less polluted. The construction of the new capital city in East Kalimantan has already attracted support from leading investors around the world, and we welcome further interest from investors who contribute to our vision of the city.