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China's absence from the list of potential investors in Indonesia's sovereign wealth fund has raised suspicions that Jakarta is trying to steer clear of investments from the world's second-largest economy, South China Morning Post reported citing Kevin O'Rourke, author of the Indonesia-focused newsletter Reformasi.Indonesia is on track to launch its own sovereign wealth fund after appointing an advisory board and getting investment commitments from 50 fund management entities. The SCMP reported that China is absent from the list of potential investors.The new fund, called the Indonesia Investment Authority or INA, will be used to fund Indonesian President Joko Widodo's ambitious infrastructure projects, including tollways, ports, bridges and airports.According to the SCMP, Jakarta is planning to seed the fund, which is expected to become operational sometime in the first quarter, with an initial USD 5 billion, with USD 1 billion coming out of the state budget. The other USD4 billion will come from the transfer of equity and assets of state-owned enterprises.Indonesia plans to eventually have USD 20 billion in the fund, which will be used to prime the country's USD 1 trillion economy.O'Rourke, in the newsletter, said Indonesia is trying to steer clear of investments from the world's second-largest economy on fears that Beijing could eventually assert control over key Indonesian infrastructure."Although never acknowledged, there is reason to suspect that a deep-seated reason for strenuous efforts to keep infrastructure activity under state ownership has been a latent fear that critical projects would be under the ownership - and, thus, control - of China," O'Rourke said."In any event, private ownership of assets faces scepticism, especially for infrastructure, especially given that the bulk of the private capital available for such projects would be foreign," he said in the newsletter.The Japan Bank for International Cooperation, which has committed USD 4 billion to the INA, and the US International Development Finance Corporation, at USD2 billion, lead the list of foreign investors.Canada's Caisse de Depot et Placement du Quebec is expected to invest USD2 billion in tollway construction projects, while Algemene Pensioen Groep from the Netherlands and Australia's Macquarie Investment Bank have soft commitments worth USD1.5 billion and USD300 million, respectively.Indonesia has also approached the Abu Dhabi Investment Authority, though no investment commitments have been made, said Airlangga Hartarto, Indonesia's coordinating minister for economic affairs.Once the INA is fully established, investors will be given a choice to invest into a "master fund" or "thematic fund", which enables them to invest in a particular industry or project.According to Indonesia's investment board (BKPM), China was Indonesia's second-biggest foreign investor in 2020, at US$4.8 billion, far behind Singapore's USD 9.8 billion. Hong Kong and Japan were the country's third- and fourth-largest investors, at USD 3.5 billion and USD 2.6 billion, respectively, BKPM said.Esther Sri Astuti, an economist with the Jakarta-based Institute for Development of Economics and Finance, said the sheer number of investment projects China already has in the country was one of the reasons it has not been approached about investing in the INA."Indonesia is also looking to diversify its portfolio to reduce the risk and collect more investments by approaching other countries," she said. "Anti-China sentiment in Indonesia remains huge, too, so that makes the government look at countries other than China."According to O'Rourke, INA is designed to maintain control over state assets and critical infrastructure projects, because "simply relinquishing the economic roles of the government goes against the economic interest of government officials".( With inputs from ANI )Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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