Press still closed to foreigners<\/p>\n
JAKARTA (JP): The Indonesian press and broadcasting industries
\nremain closed to foreigners despite a new government ruling which
\nstates otherwise.<\/p>\n
Minister of Information Harmoko announced yesterday that
\nPresident Soeharto, who by law has the power to approve or reject
\nforeign investment applications, assured that no foreigners will
\nbe allowed to own equity in the local mass media.<\/p>\n
His remarks put to rest the apprehensions of local media
\nexecutives and legislators that foreign media moguls would buy
\ninto Indonesian press and broadcasting following the government
\nregulation announced last week which theoretically opened the
\nsector to foreign investors.<\/p>\n
Harmoko, who admitted that the regulation took him by surprise
\nand stressed that he had not been consulted, visited President
\nSoeharto at Merdeka Palace yesterday morning to discuss the
\ngovernment's position.<\/p>\n
Critics of the regulation pointed out that the 1982 Press Law
\nspecifically states that foreigners are barred from owning shares
\nor taking full or partial control of the Indonesian press.<\/p>\n
\"Yes, I am very relieved that the outcome is in line with what
\nI had said earlier,\" Harmoko said after meeting with Soeharto.
\n\"My intuition has been recognized and approved by the President.\"<\/p>\n
Harmoko on Friday said that, in line with the 1982 Press Law,
\nhe would never sign any press publishing license for institutions
\nwhere foreigners have equity.<\/p>\n
He admitted that there was a contradiction between the
\ngovernment's PP20 ruling and the 1982 law, but pointed out that
\nthe new ruling did not contradict the 1967 Law on Foreign
\nInvestment which prohibits full foreign ownership of what are
\nconsidered strategic sectors, including the mass media.<\/p>\n
The new law states that foreigners can own up to 95 percent
\nequity in press and broadcasting companies.<\/p>\n
The 1967 law permits foreigners to invest in these sectors but
\nonly with the President's approval, Harmoko said. \"President
\nSoeharto says that he recognizes this situation. Since he intends
\nto abide by the 1982 Press Law as well, this means foreigners
\nwill not be allowed to own shares in Indonesian mass media.\"<\/p>\n
The government's economic policy-makers, who formulated the
\nderegulation package, have yet to explain their decision to open
\nup the mass media industry in contravention of the law, but some
\nmedia observers speculate that it was done to placate the
\ninternational community.<\/p>\n
They pointed out that Indonesia is obliged to open up its
\neconomy under the newly upgraded General Agreement on Tariffs and
\nTrade which calls for sweeping trade and investment
\nliberalization.<\/p>\n
Others speculate that the move was taken to pave the way for
\nthe country's private television networks and newspapers to go
\npublic and raise capital on local stock exchanges which are open
\nto foreigners. They pointed out that both RCTI and the Jawa Pos
\nhave announced their intention of going public.<\/p>\n
Controversy<\/p>\n
Meanwhile, Marzuki Usman, chairman of the Indonesian
\nEconomists Association and a former chairman of the Jakarta Stock
\nExchange, said yesterday that one way out of the controversy is
\nby allowing foreigners to buy portfolio investments in press and
\nbroadcasting companies without acquiring control.<\/p>\n
Through portfolio investments, Marzuki said, \"foreign
\ninvestors will not have control, they will only invest their
\nmoney.\"<\/p>\n
Harmoko said there was no need to review the regulation and
\nsought to play down the controversy. \"There is no need to make a
\nbig fuss. The policy will be implemented, but we have the Press
\nLaw to abide by, which the President confirms.\"<\/p>\n
The Association of Newspapers Publishers (SPS), which has
\nattacked the ruling, was relieved by Soeharto's assurances.<\/p>\n
\"SPS hopes that the 1967 Law on Foreign Investment and the
\n1982 Press Law will be implemented in full,\" Chairman Handjojo
\nNitimihardjo said in a statement.<\/p>\n
He pointed out that the media firms's obligation to give 20
\npercent of their shares to their employees -- as stipulated by
\nthe 1982 Press Law -- would be difficult to accomplish if foreign
\ninvestors are allowed to penetrate the local market. (pwn\/02)<\/p>",
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