Govt reaffirms its ban on foreign retailers<\/p>\n
JAKARTA (JP): The government ruled out yesterday any plan to
\nlet foreign retailers operate in Indonesia before 2020, the
\ndeadline for trade liberalization among members of the Asia
\nPacific Economic Cooperation (APEC) forum, in order to protect
\ndomestic traders.<\/p>\n
Director General of Domestic Trade Tommy Poedjhiar said here
\nthat the government has renewed its ban on foreign retailers in
\nIndonesia under Presidential Decree No. 54\/1994.<\/p>\n
\"The condition of our traders now compels us to ban foreign
\nretailers from entering the country,\" Tommy told journalists at
\nhis office.<\/p>\n
He made the remarks in response to a call from the newly
\nestablished Indonesian Retailers Association that the government
\nmaintain the ban.<\/p>\n
Sudwikatmono, chairman of the governing board of the
\nassociation and also the owner of one of the country's biggest
\nconglomerates, contended that foreign retailers, which usually
\nown global chains and have access to immense amounts of capital,
\nwould obviously out-match Indonesian retailers.<\/p>\n
Despite the ban, however, many foreign retailers have entered
\nthe country through franchise agreements and other forms of
\nbusiness tie-ups with local companies, according to Sudwikatmono.<\/p>\n
He suggested that local businessmen tap the expanding retail
\ntrade opportunities without lying to themselves by hiding foreign
\nretail operations under franchise arrangements.<\/p>\n
Examples of foreign franchised retail outlets are Sogo, Yaohan
\nand Makro, in which the investors are described as local
\nbusinessmen and only the technical know-how is franchised.<\/p>\n
Protection<\/p>\n
When asked about that matter, Tommy said: \"Don't pinpoint a
\ncertain case. What is important is that the government will
\nalways defend the interests of local retailers. So, what the
\ngovernment and the association want are just the same, to protect
\nlocal businessmen.\"<\/p>\n
The government retains the retail business on its \"list of
\nnegative investments\", which covers sectors closed to foreign
\ninvestments.<\/p>\n
Under Government Regulation No. 20\/1994, the government has
\nopened up nine public sectors for foreign investments -- which
\nrequire only a minimum of five percent in local equity holding --
\nincluding telecommunications, railways, shipping, civil aviation
\nand the media industries.<\/p>\n
Tommy said the government might review its policy on the
\nentrance of foreign retailers into the country after the year
\n2020.<\/p>\n
APEC's 18 members agreed in their informal summit in Bogor
\nlast month that its developed members will liberalize trade and
\ninvestment by 2010 and its developing members by 2020.<\/p>\n
APEC groups Australia, Canada, Chile, China, Hong Kong, Japan,
\nMexico, New Zealand, Papua New Guinea, South Korea, Taiwan, the
\nUnited States and the six members of the Association of Southeast
\nAsian Nations (ASEAN) -- Brunei, Indonesia, Malaysia, the
\nPhilippines, Singapore and Thailand. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-reaffirms-its-ban-on-foreign-retailers-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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