Indonesia has begun to tap into the green bond market, both at home and overseas, to finance environmentally friendly projects.
In February, Indonesia issued sovereign green bonds worth US$1.15 billion in the international bond market, the first sovereign bonds issued by an Asian country. Just recently, state-owned infrastructure financing company PT Sarana Multi Infrastruktur (SMI) announced it would offer green bonds of about Rp 1 trillion in the local bond market by the end of the first half to boost its financing capacity. If realized, SMI will become the first company to issue domestic green bonds.
Green bond issuance could become an important financing alternative to finance future infrastructure projects.
Financial development can affect growth via three channels (Pagano, 1993 in Giannetti, et.all, 2002): (i) it can raise the fraction of savings funneled to investment, reducing the costs of financial intermediation; (ii) it may improve the allocation of resources across investment projects, thus increasing the social marginal productivity of capital; and (iii) it can influence households’ saving rate.
RCEP formation initiatives coming from Indonesia. The initiative has been made based on the response of ASEAN to maintain ASEAN centrality of the Chinese proposal regarding the establishment of the East Asia Free Trade Agreement (ASEAN + 3) and the Japanese proposal that wants Closer Economic Partnership in East Asia (ASEAN + 6) and the level of liberalization of trade in goods on trade cooperation ASEAN free (ATI-GA) and ASEAN + 1 (AANZFTA, ACFTA, AIFTA, AJCEP, AKFTA) average about 90%. Thus to optimize traffick-ing in the region need to be made of the free trade agreements in the region. However, RCEP not negate free trade agreement ASEAN free trade (ATIGA) and ASEAN + 1 (AANZFTA, ACFTA, AIFTA, AJCEP, AKFTA) said existing. The RCEP concept was initially endorsed by ASEAN leaders in November 2011. At ASEAN’s invitation officials from Australia and ASEAN’s five other FTA partners - China, India, Japan, ROK and New Zealand - participated in preparatory discussions in the latter half of 2012 to develop Guiding Principles and Objectives for Negotiating the RCEP, which were considered by ministers in August 2012. At the 7th East Asia Summit on 20, November 2012, then Prime Minister Julia Gillard and then Minister for Trade and Competitiveness Dr. Emerson joined Leaders from ASEAN and ASEAN’s FTA partners to officially launch the RCEP negotiations.