Indonesia is moving forward with ambitious plans to position itself as a premier global investment destination by establishing the Indonesia Financial and Investment Center (IIFC). President Prabowo Subianto announced the initiative during his speech on the 2027 Draft State Budget and its Financial Note at the People’s Consultative Assembly (MPR) Building in Jakarta on Friday. He outlined that the IIFC will initially be based in Jakarta, with a second site planned for Bali, and potentially others in regions deemed attractive to international investors. The goal is to create a new financial hub focused on investment, financial technology, arbitration, and commercial dispute resolution aligned with international standards. The IIFC will operate under a structured framework, including the establishment of an advisory council, a management institute, a supervisory agency, a court under the Supreme Court, and an arbitration institute. To facilitate international engagement, the government will permit the use of English in contracts and adopt commercial law principles and international standards to ensure legal certainty for businesses. Ad hoc judges may be selected from leading legal experts within Indonesia and globally. The initiative also includes provisions for facilitating the transfer and repatriation of capital and profits, tax incentives for eligible activities, golden visas, and streamlined licensing services. Prabowo emphasized that the IIFC will create opportunities for diverse financial services, including banking, insurance, capital markets, derivatives, carbon exchanges, bullion, fintech, Islamic finance, family offices, treasury centers, and investment management. While offering these incentives, he stressed that the government will maintain strict compliance requirements, including anti-money laundering rules, beneficial ownership transparency, tax obligations, and adherence to international information-sharing standards. The aim is to provide global capital with certainty in Indonesia, attract top talent, and ensure that transactions involving Indonesian wealth are settled locally. The announcement comes alongside broader economic initiatives aimed at enhancing Indonesia’s attractiveness as a global investor. During the same speech, Prabowo highlighted the country’s AAA-rated Panda Bonds issued in China, which reflect confidence in Indonesia’s economic resilience and policy effectiveness. The bonds, totaling 7 billion yuan (approximately $1.033 billion), were issued in two tranches, three-year and five-year maturities, and marked Indonesia’s first yuan-denominated bond issuance in China’s domestic market. This move underscores the government’s strategy to diversify financing sources and reduce reliance on U.S. dollars. In parallel, Prabowo announced progress on the nation’s school revitalization program, aiming to complete renovations for all schools by 2029. As of 2026, the government had renovated 71,744 schools, up from 17,000 in the prior year. The program targets 100,000 schools in 2027 and another 100,000 in 2028, with particular attention to remote and underserved regions such as Miangas Island. The initiative includes the construction and upgrading of 66 regional general hospitals, with 20 newly operational facilities. Prabowo emphasized that improved infrastructure is essential for delivering quality education and ensuring that students have access to safe, clean, and conducive learning environments. Additionally, the government has expanded health insurance coverage to 96.8 million underprivileged Indonesians through the National Health Insurance (JKN) program. This reflects a broader effort to ensure equitable access to healthcare, complemented by the expansion of healthcare facilities, particularly in rural and remote areas. The government has also introduced specialist medical study programs in 11 provinces to address persistent shortages of doctors, aiming to increase the number of general practitioners, dentists, and specialists to meet national demand. Efforts to streamline government operations have also yielded substantial results. Through restructuring of state-owned enterprises (SOEs), the government has saved approximately Rp50 trillion ($2.8 billion) in overhead costs as of 2026. Prabowo noted that 290 of the 1,074 existing SOEs have been closed due to inefficiency and lack of profitability, with plans to reduce the total number to 300 by the end of 2026. The savings are projected to rise to Rp70 trillion ($3.9 billion), with potential allocations toward improving community health centers, renovating schools, and providing housing for citizens in need. These developments highlight a multifaceted approach to economic and social development, combining financial innovation, educational enhancement, healthcare accessibility, and administrative efficiency. With the IIFC as a cornerstone of its economic strategy, Indonesia continues to pursue a vision of becoming a more prosperous, sovereign, and globally integrated nation.
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