Indonesia's International Financial Center Governor to be Appointed Directly by President

Indonesia's House of Representatives (DPR) has approved a bill for the establishment of the Financial Center International (PFII). Under this bill, the governor who will lead the PFII will be directly appointed by the President, bypassing the usual parliamentary fit-and-proper test. Mohamad Hekal, Vice Chairman of Commission XI of the DPR, stated that no candidates have been discussed yet, and the appointment authority rests with the President. The PFII's operations are expected to involve members of the Financial System Stability Committee (KSSK) and potentially the Financial Transaction Reports and Analysis Center (PPATK). The PFII aims to commence operations promptly after the government approves a proposed area and designates it through a Government Regulation (PP). Several locations, including Bali, are currently under consideration. Danantara is anticipated to be the primary investor for the PFII's initial development. Danantara has also collaborated with a former head of the Dubai International Financial Centre (DIFC) as a consultant in formulating the PFII concept. Initial development funds for the PFII zone are expected to come from Danantara, not the State Budget (APBN). However, the APBN may be used to cover operational costs for state institutions within the zone, such as courts and judges, to ensure their independence. Business activities within the PFII will generally be conducted in foreign currency and investments will be accounted for as Foreign Capital Investment (PMA). However, daily transactions like purchasing food and beverages within the zone will continue to use Indonesian Rupiah. This system is designed to facilitate international financial transactions while minimizing impact on the domestic banking system.