Boediono assures foreign investors of equal treatment
The Jakarta Post, Urip Hudiono, Jakarta
Providing a level playing field for investors will be the government's main focus in the government-sponsored new investment bill, although certain business sectors will still be closed to foreign investors.
Coordinating Minister for the Economy Boediono said last week that an updated "negative list of investments" in the bill would only serve as a basis to conduct an initial screening of investors, but would in no way be used to apply discriminative policies against them.
"The new investment law is expected to clarify the criteria for investments which are allowable," he said.
"But after passing the screening, we want to make sure that all investors receive fair and equal treatment in implementing their investment plans," he said.
The government will particularly see to it that investors do not face lengthy bureaucratic procedures, or inconsistent policies.
"We will end a situation where investors complain of one official holding them back, but then they are able to negotiate with another official," he said. "The new investment system will have uniform and transparent rules, procedures and guidelines."
Separately, Trade Minister Mari Elka Pangestu explained that the revision of the negative list of investments in the bill was also expected to protect the nation in terms of the environment, health, welfare and morality.
"We want the list to be clear and simple, while thoroughly considering whatever is best for the country. It is still being discussed with other ministries," she said after a meeting with Boediono.
The new investment law is one of the most crucial parts of the government's recent package of policies designed to improve Indonesia's investment climate.
The bill will integrate the country's previously separate foreign and domestic investment laws, making various improvements, including simplifying the current 150-day investment permit process to a one-stop, 30-day registration process. It will also provide legal certainty in case of overlapping regional bylaws, and a guarantee for foreign investors against the threat of subsequent nationalization.
The bill is now being deliberated with the House of Representatives trade and investment commission. Boediono anticipates that the new investment law will be passed and come into effect next year.
The Investment Coordinating Board (BKPM) currently bans any investment related to toxic pollutants, drugs and firearms, and also prohibits foreign investment in the forestry, land and sea public transportation, the small retail sector, and the mass media.
The government is under pressure to act and revive investment, especially foreign direct investment (FDI), to push economic growth and resolve the pressing unemployment problem. Investors have long complained about rampant corruption, red tape, poor infrastructure, labor problems and local autonomy problems dissuading them from making new investments.
Actual FDI and their approvals saw a slow start this year, with actual FDI by the year's first half only rising slightly by 4.77 percent to US$3.51 billion. Approvals were up by only 0.85 percent to $5.98 billion.
BKPM chief M. Lutfi had said that the government planned to provide more aggressive incentives through the new investment law to lure more overseas investors into the country.