According to a senior official of the country’s most influential business association, a revised negative investment list is unlikely to be finalized by the current government, whose term expires in October, given that business leaders first would first have to be consulted.
The negative list sets out sectors of the economy that are off limits to foreign investors, or subject to restrictions.
“[The government] said it would send us the draft before was is made public,” said Chris Kanter, chairman of the permanent committee on foreign investment at the Indonesian Chamber of Commerce and Industry (Kadin), after attending a question-and-answer session with former central bank Governor Boediono, President Susilo Bambang Yudhyono’s running mate.
Chris said that since he became committee chairman, he had twice officially asked the government to complete the promised revisions so as to give a clear signal the nation was serious about attracting investors.
Issued in 2007, the latest version of the negative list defied expectations by actually increasing restrictions on foreign ownership in 23 sectors, prompting protests from the international business community.
The government has consistently said that it was open to further changes after seeing how the application of the 2007 list panned out.
There has been widespread confusion about the extent to which the list has been enforced, only adding to the difficulties faced by businesses making investment decisions.
According to Chris, the rules barring foreign investment in strategic industries needed to be updated, “particularly in the mining, logistics, telecommunications, health, education and retail sectors.”
He said that the 2007 list should have opened up these sectors to foreign investment, rather than further restricting them.
“We still don’t know whether the government will finally open up these sectors or not, because as you heard when I asked Boediono for his views on this, he said that it would depend on the next government,” Chris said after the meeting.
Now that Kadin and the private sector have expressed their views, he said, the government needed to show that it remained committed to completing the final revisions.