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Indonesia Must Improve Business Climate to Attract Saudi’s Investment

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Arsianews, Jakarta – Crown Prince of Saudi Arabia Mohammed Bin Salman (MBS) just finished his Asian tour visits to three countries. MBS visited Pakistan, India and China last month. Indonesia and Malaysia were on the list but MBS canceled his visit to The South East Asia nations.

During his visit to Pakistan, India and China, MBS signed agreements worth to US$ 130 billion. The agreement with Pakistan is worth to US$20 billion, India is US$100 billion and China is US$10 billion. Most of the cooperations in the energy, infrastructure, farming and manufacture sector.

Saudi oil company, Aramco, has made an agreement to build a complex of petrochemicals and oil distillation with North Industries Group Corporation Limited (Norinco), Chinese defence corporation.

In India, Saudi Arabia will be building an oil refinery, developing tourism, housing, and infrastructure. An oil refinery will also be built in Gwadar, a harbor city in southern Pakistan. China and Pakistan also cooperate to develop an economic corridor.

All of this investment is far greater than the commitment promised by King Salman, MBS’s father, when visited Indonesia in 2017. At that time, both countries sign an agreement worth US$6 billion between Pertamina and Aramco for the construction of oil refinery in Cilacap.

Comparing with the results of King Salman’s visit to China after he visited Indonesia, the investment value with Indonesia was much smaller. At that time, King Salman signed an investment agreement worth US$65 billion with Chinese President Xi Jinping.

As quoted by Bisnis Indonesia, Teuku Rezasyah, an international relations analyst from Padjadjaran University, said Indonesia needs to step up the game and improve the investment climate so that Saudi wants to invest more in Indonesia.

It can be done by taking more serious action to eradicate corruption. The government also need to do more intensive diplomacy to Saudi Arabia by embracing central and regional government, entrepreneurs, academics, and Arabic communities in Indonesia.

“Saudi Arabia is always get incentive and legal warranty when investing in Europe and America,” said Rezasyah. He suggested, the Indonesian government could hold an investment summit between the two countries to increase both bilateral and economic relations.

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