Islamic financing for infrastructure development to top agenda for WIEF in Jakarta

JAKARTA – This year’s World Islamic Economic Forum in Jakarta will promote Islamic financing for Indonesia’s infrastructure development, WIEF general secretary Tan Sri Ahmad Fuzi Abdul Razak told Salaam Gateway.

“We think [infrastructure financing] is the most anticipated sector for financing in Indonesia, not only under G2G financing schemes but also B2B. We hope to see concrete agreements through this event,” said Abdul Razak.

He added that there will be a discussion, separate from the main event, which will focus on infrastructure financing between Indonesian and Malaysian companies that will include large local businesses such as aerospace company PT Dirgantara Indonesia, telco PT Telekomunikasi Indonesia and state lender Bank Rakyat Indonesia.

The organizer of the annual WIEF is a Malaysian organization based in Kuala Lumpur.

Indonesia’s infrastructure projects will need a total of 4,700 trillion Indonesian rupiah ($356 billion) by 2019, 36.5 percent of which will be funded by private entities, according to data from the National Development Planning Agency (Bappenas). Private sector involvement contributes 22 to 44 percent of infrastructure development globally, according to Bappenas.

Assistant minister for macroeconomy and international finance at Indonesia’s Ministry of Finance, Andin Hadiyanto, told Salaam Gateway the Indonesian government will continue to work on several policies to create an attractive investment climate and boost business confidence, including deregulation of certain sectors and incentives to spur growth of private companies.

"PPP (public-private partnerships) schemes can also be offered. They can be used for public infrastructure projects. But due to the tariff burden, support is needed in the form of incentives to ensure its feasibility," said Hadiyanto.

© SalaamGateway.com 2016