Foreign investors are welcoming moves by the Investment Coordinating Board to push for changes to the much-maligned “negative investment list,” which limits foreign ownership in a number of sectors.
Gita Wirjawan, chairman of the board, known as the BKPM, said on Monday that the government was finalizing the revisions that would open five sectors to foreign investment, and it was expected to be completed within two months.
The sectors are education, telecommunications, courier services and logistics, creative industries and health care.
Clifford Rees, chairman of the European Business Chamber of Commerce in Indonesia, praised Gita for “keeping his promise” to increase the chance for foreign investment. “Foreign ownership would increase the quality of the sectors chosen,” Rees said.
However, Rees noted that the BPKM chief would face a challenge in securing the approval of related ministries. “Gita will have to coordinate well with related ministers and their ministries to achieve a positive atmosphere for foreign investors, and make it more like how it was in early 2000, when I think the atmosphere was better for foreign investors,” he said.
The World Bank’s country director for Indonesia, Joachim von Amsberg, said the nation had missed the chance to create hundreds of thousands of good jobs by restricting foreign investment in the five sectors.
“When the Philippines opened up its telecommunications sector to foreign investors in the 1990s, it created hundreds of thousands of jobs and increased its competitiveness in the eyes of the world,” he said.
Under the revised list, foreign investors would be able take ownership stakes in companies in the five sectors.
As an example, Gita said that foreign companies would soon be allowed to take a maximum 67 percent stake in hospitals and other health care facilities nationwide, after previously being restricted to Medan and Surabaya.
Gita said this would reduce the number of Indonesians seeking medical care abroad, boosting the nation’s income.
“We hope that with foreign investors investing in our country’s health care system, it will increase the quality of our health care and Indonesians will rely on it more,” he said.
In the longer term, he hoped knowledge would be transferred from foreign health care workers to domestic personnel.
Foreign ownership in the film and logistics industries will be limited to 49 percent.
In the education sector, the government will create a body to replace the non-profit Legal Education Entity (BHP). Foreign investors will be allowed to put their money into the body, which would operate private schools and offer educational services.
In the telecommunications sector, there is still a debate within the Information Ministry about whether foreigners should be allowed to buy cellular telecommunication towers and other infrastructure.
Gita promised to find the “best solution” for this sector.
For 2010, Gita has set an investment target of at least $5 billion, and a target of $33 billion over the next five years.
“I would like to attract not dozens of [small] projects, but big ones that can reach $1 billion,” Gita said.