That is double the US$100 billion target set earlier this year, and a long way from the fund’s US$15 billion start. The fund has been in talks with 50 fund managers and has received pledges from those in the United Arab Emirates, Japan, the US and Canada, which will help it grow to US$20 billion in six months, the president said.
“We can reach this,” Jokowi, as the president is commonly known, said in Jakarta. “We give investors the freedom to choose whether to invest in the entire portfolio or to choose the thematic funds. This is what I think is unique.”
The fund, known as the Indonesia Investment Authority, allows investors to place money in sub-funds spanning infrastructure, health care, tourism, technology and the development of a new national capital city planned on the island of Kalimantan. Indonesia, which has long lagged in attracting foreign direct investment, is banking on the wealth fund to finance long-term development and help Jokowi’s push for the economy to move beyond a reliance on raw resources.
Home to the world’s largest nickel reserves, Indonesia is determined to climb up the value chain and become a hub for end-to-end battery-making. It recently set up its own electric vehicle battery holding company and is seeking joint ventures with several global players, including China’s Contemporary Amperex Technology and South Korea’s LG Chem.
The government has also pledged to maintain a zero per cent luxury tax rate on electric cars to boost domestic sales and create a more attractive market for investors.
“We want to build a green economy, which produces green products, so that we can move toward green energy,” Jokowi said.