Key Takeaways
- • Paramadina University Islamic economics observer Imas Damayanti says the prolonged Middle East conflict, active since the beginning of 2026, could shift investment flows from Gulf states toward safer Southeast Asian markets including Indonesia.
- • Damayanti cites a potential loss of up to US$58 billion in international tourist spending from airspace closures in the Gulf region, with strategic property and digital projects in Dubai and Doha at risk of delay or suspension.
- • Multinational companies that had considered Riyadh and Dubai as regional headquarters are reportedly exploring Southeast Asian alternatives, which Damayanti argues gives Indonesia an opening.
- • Damayanti says Indonesia must offer concrete improvements in legal certainty, ease of doing business and regulatory predictability for the opportunity to materialize.
- • Damayanti links potential capital inflows to rupiah strength and job creation, but states that the benefits depend on actual investment realization.
Summary
The prolonged conflict in the Middle East may prompt a shift in investment flows from Gulf countries to safer regions, including Southeast Asia, according to VOI.ID. Imas Damayanti, an observer of Islamic economics at Paramadina University, said conflicts involving military tensions in the Middle East since the beginning of 2026 have affected not only the economies of the countries involved but also investor confidence in the stability of the Gulf States. She said the lack of concrete resolution to the security situation could lead investors to review their capital placements, opening opportunities for Indonesia to attract investments previously planned for the Gulf.
Damayanti warned that Gulf instability could disrupt sectors the region is developing to reduce its dependence on oil and gas, particularly tourism. She said airspace closures in the Gulf could cause a loss of up to US$58 billion in international tourist spending, and that strategic property and digital projects in business centers including Dubai and Doha face risks of delay or suspension. She also said security uncertainty could affect multinational companies that had considered Riyadh and Dubai for regional or headquarters locations, and that some are now examining Southeast Asian alternatives.
Damayanti cited the reported missile attack on King Khalid International Airport in Riyadh, which she attributed to the Yemeni Houthi group, as evidence of security concerns in the region. She argued that Indonesia, as a relatively safe ASEAN country free from maritime and air conflicts, is well positioned to be considered. However, she stressed that the opportunity will not materialize automatically. She urged the government to quickly identify companies and projects capable of relocating investment, prepare tailored offers, and strengthen regulatory certainty and a conducive business climate.
According to Damayanti, capital inflows could support the rupiah, expand economic activity and encourage national development, but these benefits depend on actual investment realization and its effect on domestic economic activity. She called on the government not to lose momentum amid shifts in the global investment risk map, and to ensure that capital moving from the Gulf translates into investments that support growth and job creation.
Damayanti warned that Gulf instability could disrupt sectors the region is developing to reduce its dependence on oil and gas, particularly tourism. She said airspace closures in the Gulf could cause a loss of up to US$58 billion in international tourist spending, and that strategic property and digital projects in business centers including Dubai and Doha face risks of delay or suspension. She also said security uncertainty could affect multinational companies that had considered Riyadh and Dubai for regional or headquarters locations, and that some are now examining Southeast Asian alternatives.
Damayanti cited the reported missile attack on King Khalid International Airport in Riyadh, which she attributed to the Yemeni Houthi group, as evidence of security concerns in the region. She argued that Indonesia, as a relatively safe ASEAN country free from maritime and air conflicts, is well positioned to be considered. However, she stressed that the opportunity will not materialize automatically. She urged the government to quickly identify companies and projects capable of relocating investment, prepare tailored offers, and strengthen regulatory certainty and a conducive business climate.
According to Damayanti, capital inflows could support the rupiah, expand economic activity and encourage national development, but these benefits depend on actual investment realization and its effect on domestic economic activity. She called on the government not to lose momentum amid shifts in the global investment risk map, and to ensure that capital moving from the Gulf translates into investments that support growth and job creation.
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