Jokowi pushes foreign investment drive with Cabinet makeover

Jakarta

INDONESIAN President Joko Widodo officially established the Ministry of Investment on Wednesday, a key piece of his drive to attract overseas money to aid the country's pandemic recovery.

South-east Asia's biggest economy is aiming to lure more foreign direct investment to help boost growth to

5 per cent this year after suffering its first contraction last year since the Asian Financial Crisis in 1998.

The new ministry was approved earlier this month with the aim of increasing investment and expanding job creation. It will be led by Bahlil Lahadalia, who will also remain head of the Investment Coordinating Board.

The ministry's main objective is boosting the quality of foreign and domestic investments, Mr Bahlil said after being sworn in as minister at the presidential palace in Jakarta. Small- and medium-sized businesses will get more attention from the government, he added.

Wednesday's cabinet makeover is the second in four months. In December the health minister was replaced amid criticism over the response to the pandemic, and new appointments were announced for trade, social affairs and tourism posts.

Mr Joko has prioritised luring overseas investment and overcoming the country's reputation for onerous, overlapping and confusing regulations.

Indonesia last year implemented an omnibus law that aims to cut red tape and reform the investment bureaucracy, with a goal of reaching 900 trillion rupiah (S$82 billion) of total direct investment this year. Mr Joko is also targeting US$200 billion for a newly established wealth fund to finance long-term development.

The country managed to record 826 trillion rupiah in direct investment last year despite the pandemic - 2.1 per cent higher than 2019 - and it did not include investments in upstream oil and gas, financial services and those made by the government.

Mr Joko on Wednesday also appointed Nadiem Makarim, co-founder of ride-hailing giant Gojek, as minister for the newly merged Ministry of Education, Culture, Research and Technology. The previous Ministry of Research and Technology was led by Bambang Brodjonegoro.

He also named Laksana Tri Handoko, former chief of the Indonesian Institute of Science, as head of the new National Research and Innovation Agency. BLOOMBERG