News

Jokowi Brought Agreements from UAE, But None for the IKN

President Joko Widodo's visit to the United Arab Emirates (UAE) resulted in several bilateral cooperation agreements between the governments and business entities of the two nations. However, there is still no certainty regarding investments for the Nusantara Capital City (IKN) project.

The agreements between Indonesia and the UAE were announced in front of President Jokowi during a bilateral meeting with President Sheikh Mohamed bin Zayed Al Nahyan (MBZ) at Qasr Al Watan in Abu Dhabi on Wednesday, July 18, 2024.

Previously, Jokowi stated that the UAE's Emaar Properties had committed to investing in IKN. However, the president did not disclose the value of the investment.

"I do not want to mention it because it hasn't been signed yet, but it is a huge investment," Jokowi stated at the groundbreaking ceremony of the Astra Biz Center and Nusantara Botanical Garden in IKN on Tuesday, June 4, 2024. "God willing, it will be signed in July in Abu Dhabi or Dubai."

According to Jokowi, Emaar Properties became interested in investing after a series of work visits to Indonesia, including trips to Nusa Dua, Labuan Bajo, Mandalika, and IKN.

The agreements reached between Indonesia and the UAE during Jokowi's visit include:

1. Memorandum of Understanding (MoU) between the Indonesian State-Owned Enterprises (SOEs) Ministry and Eagle Hills on Enhancing the Tourism Ecosystem through Cooperation with State-Owned Assets in the Airport and Logistics, Services (Hospitality), and Tourism Destination Sectors;
2. MoU between the Dubai International Financial Centre Authority and the IKN Authority;
3. MoU between Indonesia Comnets Plus and Abu Dhabi Future Energy Company (Masdar) on Joint Study of Solar Rooftops in Indonesia;
4. MoU between Emirates Nuclear Energy Company of the UAE and the Indonesian National Research and Innovation Agency on Cooperation in Nuclear Power Generation to Support the Nuclear Programs of the UAE and Indonesia;
5. MoU between the UAE's Mohamed Bin Zayed Species Conservation Fund and the Indonesian Coordinating Ministry for Maritime Affairs and Investment on the Establishment of the Sheikh Mohamed Bin Zayed and Joko Widodo International Mangrove Research Center in Bali, Indonesia;
6. MoU between the Indonesian Finance Ministry and the UAE Finance Ministry on Public Financial Management;
7. MoU between Bank Indonesia and the UAE Central Bank (UAECB) on Payment System Cooperation;
8. Cooperation Agreement in the Field of Maritime Patrol Aircraft and Anti-Submarine Aircraft.

To date, there has been no realization of foreign investment for IKN despite the government receiving hundreds of MoUs and letters of intent (LoIs) or preliminary agreements for cooperation. This was revealed by Investment Minister/Investment Coordinating Board (BKPM) Head Bahlil Lahadalia in response to questions during a meeting with House of Representatives (DPR) Commission VI on Tuesday, June 11, 2024.

"The investments that have entered IKN in the first phase are all domestic investments. There has been no foreign investment that has carried out groundbreaking," Bahlil said.

From 2022 to the end of 2024, the government will allocate a budget of Rp 72 trillion from the state budget for the development of IKN. Jokowi has repeatedly stated that the first phase of development using the state budget will only cover government buildings. However, investment is needed to continue the 15 percent of the development funded by the state.

Related Articles