30 April 2024 - Technical Assistance II
As ARISE+ Indonesia draws to a close after five and a half years of implementation, the programme is poised to leave a lasting legacy that will strengthen Indonesia's trade competitiveness and attract European investment to the region. The launch of the Attraction Plan for EU Investment in Indonesia and the initiation of the re-establishment of the EU Desk at the BKPM on 25 April 2024 are marked as key milestones among its achievements.
Highlighting the programme's approach, Alessandro Martinatto, Team Leader of ARISE+ Indonesia Technical Assistance II, remarked, "We have worked on multiple areas all related to trade and investment, and our approach has consistently been to implement activities that are relevant and impactful."
The launch ceremony was officiated by Mr Nurul Ichwan, Deputy Minister for Investment Promotion at the Ministry of Investment/BKPM, and His Excellency Denis Chaibi, Ambassador of the European Union. Ms Laksmi Kusumawati, Director of Trade Investment and International Economic Cooperation at the Ministry of National Development Planning/Bappenas and ARISE+ Indonesia Programme Manager, also delivered the keynote speech.
Mr Martinatto explained that the Investment Attraction Plan offers a strategic approach to mobilise European investments into Indonesia in mutually prioritised sectors. By aligning Indonesia’s investment opportunities with the EU's innovative investors, clusters, and centres of excellence, the plan aims to create synergies that will benefit both economies.
The Plan has been developed in response to BKPM’s request for technical assistance in strategically identifying segments of quality EU FDI to target and attract. "We were very supportive of the idea, not only because it provides a concrete tool to strengthen collaboration between our two economies, but also because it coincides with the rollout of EU programmes such as the Global Gateway Initiative, the guarantee mechanism, and the European Fund for Sustainable Development, all focused on mobilising investment in key sectors for both Indonesia and the EU," Mr Martinatto added.
Daniel Nicholls, the Investment Policy Senior Expert of ARISE+ Indonesia, outlined the key stages in developing the Investment Attraction Plan. The process began by selecting sector groupings that align with priorities of BKPM, the Government of Indonesia, and the EU, including the Global Gateway initiative. This was followed by supply and demand analyses, evaluating factors important to EU investors and reviewing outward FDI trends from Europe. The insights gained led to the prioritisation of specific segments for proactive investment attraction based on their FDI track records and feedback from corporate and expert stakeholders. The final stage involved formulating strategic actions to convert insights into practical outcomes, leveraging BKPM’s network of partners to mobilise investment and operationalise the plan.
"This comprehensive framework not only targets immediate investment opportunities but also strategically positions Indonesia to attract long-term EU investments in high-growth sectors," Mr Nicholls stated.
He further highlighted six sectors identified as priorities by both Indonesia and the EU: renewable energy, healthcare & pharmaceuticals, electronics & information communication technology, automotive (electric vehicle supply chain), transport and logistics, and agribusiness and fisheries. The Plan also addresses key cross-sectoral themes, including the green, blue, and circular economy, technology and digitalisation, and downstreaming.
The Attraction Plan for EU Investment in Indonesia recommends six strategic actions to optimise Indonesia's Investment Partnerships Framework, including re-establishing an enhanced EU Desk at the Ministry of Investment/BKPM, identifying new SDG-oriented investment-ready projects with EU support, consolidating Indonesia’s investment presence in Europe through enhanced partnerships, enhancing collaboration with government partners to showcase opportunities to EU investors, organising regular sessions with European partners in Indonesia/ASEAN on potential investment opportunities, and conducting confidential consultations with European partners on potential investment leads.
Mr Martinatto highlighted the essential role of the EU Desk as an investment facilitation service supporting European investors exploring Indonesia as a potential destination. The Desk will offer various types of information and support to these investors, including identifying investment projects in Indonesia within the priority areas outlined in the Plan. Moreover, the EU Desk also provides hands-on support to various stakeholders involved, such as BKPM, Bappenas, and bilateral financial institutions.
"This is to ensure that these investment opportunities do not merely remain as possibilities but materialise into investable and bankable projects," Mr. Martinatto emphasised.
The Deputy Minister for Investment Promotion at the Ministry of Investment/BKPM, Mr Nurul Ichwan, welcomed the re-establishment of the EU Desk at BKPM. He noted that there had previously been an EU Desk at BKPM, referring to that period as a very productive and positive time for the partnership between Indonesia and the EU.
Mr Nurul expressed his hopes, stating, "With the reactivation of this EU Desk, we aim to foster a better mutual understanding between Indonesia and the EU, focusing on collaborative efforts that will positively impact both economies."
