Yet observers caution that the centre, which is projected to attract billions of US dollars in investment, is unlikely to deliver an overnight transformation, as crucial details surrounding tax incentives, investor requirements and regulatory safeguards are still to be finalised.
Indonesia’s Investment Minister Rosan Roeslani said the legislation “addressed a clear gap” as despite the country’s “strong economic fundamentals”, it had never had a dedicated centre meeting the governance benchmarks that global financial institutions had come to expect.
The new legal framework will include an arbitration body and a special court to settle disputes arising within the financial centre, alongside a supervisory board and a dedicated governmental body answerable directly to the president and parliament.