JAKARTA: Investment and Downstream Minister Rosan Roeslani says that escalating tensions in the Middle East are leaving foreign investors to seek safer destinations, and some are considering shifting their focus to Indonesia due to its political stability.
Speaking at a hearing with the House of Representatives Commission XII, overseeing energy and mineral resources, on Monday, Rosan said investors, particularly from the Middle East, are stepping up engagement with the administration.
“We are seeing that with heightened tensions, especially in Middle Eastern countries, investors from the region are intensifying discussions with us. We are also actively meeting prospective investors,” he told a House hearing, without specifying sectors or types of investment that could be redirected.
Rosan, who also serves as chief executive officer of state asset fund Danantara, said the fund is exploring potential aviation partnerships between PT Garuda Indonesia and several Gulf carriers.
He said efforts were also being made to improve the efficiency of Haj flights, potentially through the formation of a joint venture as directed by President Prabowo Subianto in the last cabinet plenary hearing.
He added the fund remains “open” to various opportunities and had also held preliminary talks with United Arab Emirates carriers, Emirates and Etihad, but added that the transformation process will take time, particularly as rising global jet fuel prices continue to weigh on the aviation industry.
Overseas visits by President Prabowo also have helped boost investor confidence, as the president meets global business leaders to present the country’s economic outlook and policy direction, Rosan told lawmakers.
Investment at the start of the year came under pressure, he said, but Indonesia’s open, nonaligned foreign policy, as reflected in Prabowo’s visits to the United States and other Western countries, as well as China and Russia, has been well-received.
It helped sustain its appeal to a broad range of investors, he said.
“This helps give confidence that the government understands global geopolitical and economic dynamics, allowing investment to enter and grow,” he continued.
Prabowo earlier this month made his first state visits to Japan and South Korea since taking office in October 2024, securing investment commitments across a range of sectors.
Japan pledged investments worth US$23.6bil in areas including energy and security, while the South Korean visit resulted in 27 memorandums of understanding spanning manufacturing to infrastructure, with a combined value of US$10.26bil.
Investment realisation is estimated at around 497 trillion dong for the first quarter of 2026, up about 7% year-on-year (yoy).
Meanwhile, for the full year, the government has set an investment target of 2.04 quadrillion dong, under its 2026 work plan.
Foreign direct investment had long accounted for around half or slightly more than half of total investment, but the balance reversed last year as domestic capital overtook foreign inflows.
Domestic investment exceeded foreign direct investments by about 130 trillion dong in 2025, reaching 1.03 quadrillion dong versus 900 trillion dong.
Total realised investment rose 12.7% y-o-y to 1.93 quadrillion dong last year, slightly above the government target but slowing from 20.8% recorded in 2024. Further growth this year is expected to be driven by domestic investment, particularly through funding from Danantara, Rosan said earlier this year, as the state asset fund plans to ramp up its investment. — The Jakarta Post/ANN
