Indonesia bets on Bali’s ‘aura’ to build new international financial centre to rival Singapore and Hong Kong
BALI, July 25 — Indonesia is moving to turn its famed resort island of Bali into an international financial centre, with senior adviser Luhut Pandjaitan pitching it as a safe haven for global investors.
Luhut, chairman of Indonesia’s National Economic Council, told This Week in Asia, the South China Morning Post’s regional affairs platform, on the sidelines of the Nusa Dua Forum that interest had grown among investors seeking alternatives amid geopolitical tensions, including the conflict in the Middle East.
“They said ‘We’d like to move our assets, we’d love very much to stay away from here and live in Bali, because it’s so peaceful in Bali’,” he was quoted as saying.
The 78-year-old said Indonesia must improve transparency and tackle corruption to build investor confidence as it seeks to compete with established financial hubs such as Singapore, Hong Kong and the United Arab Emirates.
“Without this, it’s very hard to gain trust and credibility,” he said.
Indonesia’s parliament recently passed legislation paving the way for the financial centre, with the government expected to announce details including its location and incentives soon.
Luhut said the hub could operate under international commercial law rather than Indonesia’s civil code, similar to Hong Kong’s legal framework.
“It’s like one country, two systems,” he said.
The proposed hub is part of Indonesia President Prabowo Subianto’s wider push to attract investment and lift economic growth from around 5 per cent currently to 8 per cent by 2029.
Luhut said Indonesia’s digital infrastructure, artificial intelligence development and young workforce would help drive growth, while dismissing concerns over the country’s economic outlook.
“I think 8 per cent – with digital infrastructure support, artificial intelligence and also with the family offices – I don’t think it’s a big deal,” he said.
The plan comes as Indonesia faces investor concerns over transparency and market governance, with global index provider MSCI warning it could downgrade the country’s status from emerging to frontier market.
Luhut said the government was committed to reforms to improve trust among investors and strengthen Indonesia’s economic position.
“We’re going to be very transparent. We’re going to be more efficient, there’s going to be less corruption,” he told the Hong Kong-based news outlet.
