Indonesia has proposed the establishment of special low-interest funds to facilitate Chinese investment in Indonesia for four investment corridors within the framework of the Belt and Road Initiative (BRI).
The proposal was conveyed by President Joko Widodo during a bilateral meeting with Chinese President Xi Jinping at the G20 Summit in Osaka last weekend, Coordinating Maritime Affairs Minister Luhut Binsar Pandjaitan told reporters during a coffee morning in Jakarta, Tuesday.
“The president proposed a low-interest special fund for Chinese companies that invest in Indonesia in the framework of the four corridors. And their partners will be Indonesian companies so our companies can enjoy cheaper loans,” Luhut said.
The establishment of special low-interest funds would help the circulation of money in Indonesia, considering the fact that investment projects in the four corridors amount to billions of American dollars, Luhut pointed out.
The Chinese and Indonesian governments have agreed to structure the special fund, according to him.
“(President) Xi Jinping agreed to arrange the structure (of the special fund). Sri Mulyani (Finance Minister) is also working on the structure,” he said.
There are no government guarantees in these funds, Luhut assured. The establishment of a special fund is an attempt by the government to get cheap funds without increasing the country’s debt, according to him.
Cheap funds for investment projects in Indonesia were not given earlier by the Chinese government to the Indonesian government, the ministry’s Deputy for Infrastructure Coordination, Ridwan Djamaluddin stressed on a separate occasion.
“(It will be given) to Chinese and Indonesian companies that are cooperating. China has cheap funds invested here and there, so we have asked them to also provide such funds to Indonesia,” he said.
The proposal of special low-interest funds will later be reiterated by Luhut during his work visit to China on Wednesday, July 3.