Ban on foreign Internet investors lifted by govt
Ban on foreign Internet investors lifted by govt
JAKARTA (JP): The government announced on Monday it had
removed information multimedia services from the list of
industries closed to foreign investment in the controversial
Presidential Decree No. 96/2000.
The government also dramatically amended the decree by wiping
out the original decree's foreign investor ownership limits in
sectors including telecommunications, air transportation and port
management; power generation, transmission and distribution;
shipping; drinking water supply; train services; atomic power
generation; and various medical services.
The original decree allowed foreign investors to own up to a
95 percent stake in local companies operating in port
construction and management; electricity generation, transmission
and distribution; shipping; drinking water supply; train
services; atomic power generation; and various medical services.
While foreign ownership in the telecommunications and air
transportation sectors was limited to 49 percent.
Under the revised decree, foreign investors can enter any of
the above sectors with the cooperation of local partners.
Riza Primadi, deputy to the state minister of investment and
state enterprises, said that limits on foreign ownership in those
business sectors would be determined by a separate government
regulation.
But he was sure that foreign ownership in the
telecommunications sector would be set at up to 95 percent.
The revision, which takes the form of presidential decree and
was signed by President Abdurrahman Wahid on Aug. 16, came way
earlier than Sept. 8 as was expected.
The issuance of the original decree on July 20 sparked wide-
spread criticism from local and foreign Internet players.
The government defended its policy, saying the ban was
designed to curb the influx of foreign Internet players to the
country and give more opportunities for local companies to
strengthen their positions.
Internet entrepreneurs and analysts said it would be
impossible for local companies to continue in businesses without
foreign backing.
All of the existing major Internet companies like Astaga!com,
Detik.com, Catcha.co.id and IndoExchange.com are partly owned by
foreign venture capital companies.
The criticism was acknowledged when several government
institutions, including the office of the minister of investment
and state enterprises, held a joint meeting on Aug. 14. An
official letter requesting the revision of the decree followed
the next day.
Minister of Trade and Industry Luhut Pandjaitan, who earlier
called the decree a big mistake, said on Monday his office had
received lots of complaints -- especially from foreign investors
-- about the decree.
"I received so many complaints from foreign companies that
have invested in the Internet here. It surely made all of us
realize how big foreign investors' interests are in our Internet
industry," he was quoted by Antara as saying.
He said that given the strong foreign investment in the local
Internet industry, it was expected to develop at a rapid rate in
the near future.
He said with its huge potential market, Indonesia was expected
to account for at least 10 percent of the global Internet market
in the next eight years. (byg/cst)