Indonesia to open up its economy

AKARTA: Indonesia plans to open up its economy in some of the sectors restricted to foreign investors as well as allowing them to increase their interests in local businesses in the latest move to attract more foreign direct investments.

They include allowing foreign investors in the management and operations of ports, airports, land terminals and drydocks while ensuring such projects remained within the parameters of public-private partnerships.

The Indonesian government also plans to open the doors to foreign investors wishing to operate film distribution business, with an ownership limit set at 49 per cent.

English daily the "Jakarta Globe" reported today that the move to relax the restrictions was the outcome of a meeting between several Indonesian government officials and prominent members of the business community chaired by Indonesian Coordinating Minister for Economy, Hatta Rajasa, here, yesterday.

The report said the relaxation plan would also allow investors from Asean countries to own up to 51 per cent of the local advertising business.

The government also plans to let foreign investors control up to 85 per cent of pharmaceutical business, up from a maximum of 70 per cent.

Foreigners seeing opportunities in the eco-tourism industry can own up to 70 per cent of a local outfit, an increase from a current maximum of 49 per cent.

The telecommunications sector will be standardised at 65 per cent. Foreign firms will be allowed to own 85 per cent of venture capital firms, up from 80 per cent.

Hatta said the idea behind the move to relax the restrictions was to show foreign investors that Indonesia has no intention to close its economy.

"We will not become more restrictive," said Hatta, adding that the government had little room to manoeuvre in cases where rules were required to protect the national interest.

"We will continue to protect our small and medium enterprises," the minister said.

The decision, however, has yet to be finalised and the government will have another meeting with local businesses to come up with more details on the plans, Hatta added.-