JAKARTA: Indonesia's new sovereign wealth fund will offer dedicated industry funds in a bid to drum up US$15 billion investment and deepen access to global capital by Southeast Asia's biggest economy, finance minister Sri Mulyani Indrawati told Reuters.
"That's creating a higher leverage which in the medium to long-term is not going to be sustainable," said Sri Mulyani. The government's new Job Creation Law, of which the fund is part, seeks to address some of those concerns, most notably by harmonising regulations contained in 79 different laws.Indonesia's fund seeks to attract investment to finance infrastructure projects and stimulate economic growth, following models adopted by countries including India, Turkey and Malaysia.
"The more politicised an investment policy, the less likely it is to generate attractive returns," said a former senior government official. The government was currently mulling options for tax incentives for investors, including a"tax holiday" or allowance, she said.
Source: News Formal (newsformal.com)