The Ministry of State-Owned Enterprises (SOEs) of the Republic of Indonesia has signed an MoU with UAE’s Eagle Hills Properties on 17 July 2024 to boost Indonesia’s infrastructure and tourism sectors. Mr. Mohammed Alabbar, founder and chairman of Eagle Hills Properties, founder of Emaar Properties and the Indonesian Minister of SOEs Erick Thohir signed the agreement in the presence of UAE President Sheikh Mohammed bin Zayed Al Nahyan and Indonesian President Joko Widodo. The agreement outlines an investment of 3 billion dollars in Indonesia’s tourism industry.
There are five crucial aspects of this agreement:
- Development of new tourism ecosystems
- Comprehensive investment in property development, tourism destinations, and airports
- Enhancement of airport infrastructure and capacity, especially Soekarno-Hatta International Airport in Jakarta
- Knowledge transfer through workshops, joint studies, and training programs
- Upgrading of state-owned hotels to international standards
Minister Erick Thohir stated that the MoU will greatly help Indonesia develop its tourism sector, increasing its potential manifold. He further remarked that establishing an agreement with Eagle Hills sets the stage for singular growth and development in the hospitality industry. The MoU aligns with Indonesia’s national strategy to diversify its economy and project itself as a global tourist destination. He believes the agreement will boost Indonesia’s infrastructure, create job opportunities, and enable economic growth in the archipelago.
Regarding the Ministry of SOEs role, Minister Erick wrote on Twitter: “We want BUMN to be able to help encourage the tourism sector to make a greater contribution to state income by improving the ecosystem and infrastructure development.” Speaking about Indonesia’s potential in the tourism sector, Mr Alabbar noted that the country has ample resources and tourist destinations. He added that Eagle Hills would support Indonesia’s efforts to increase the tourism sector’s contribution to the Gross Domestic Product (GDP).
The MoU will be valid for one year and can be extended through mutual agreement. There is considerable flexibility in implementing the 3 billion dollar investment as there is no fixed time frame for its use.
The MoU reflects Indonesia’s efforts to invite foreign expertise and investment to boost its tourism sector and eventually re-design its tourism industry. The Ministry of SOEs has been trying to facilitate collaboration between global companies and Indonesian SOEs to encourage impact and productivity for Indonesia. Several SOEs have already collaborated successfully with international companies. It includes the US’s Merck for vaccines, UAE’s Masdar for clean energy, and Swire Hong Kong for healthcare. Collaboration with Canada’s Vale-Based-Metal for nickel production, European Automakers and Ford for manufacturing have helped Indonesia’s electric vehicle (EV) ecosystem.
Minister Erick reaffirmed that such agreements establish that Indonesian SOEs are competitive and meet global standards and the expectations of international partners.
