Foreign wholesalers banned

JAKARTA (JP): The government has prohibited foreign wholesalers and distributors from entering the domestic retail market.

A decree issued by State Minister of Investment Sanyoto Sastrowardoyo on Wednesday states that the ban came into effect April 30, Antara reported yesterday.

The decree also rules that large foreign distributors can only operate in Jakarta and provincial capitals.

If the wholesalers wish to set up operations in other urban areas, they must establish partnerships with local small-scale entrepreneurs or cooperatives, which must be entitled to at least 51 percent of the stakes.

In January, the government agreed to terms made by the International Monetary Fund to dismantle all restrictions on foreign wholesale and retail trade in smaller urban areas, in exchange for a US$43 billion bailout package.

The new decree states that a wholesaler or distributor can be established by a foreign citizen or company in partnership with an Indonesian citizen or company.

The government also issued a decree yesterday which rules that foreign retailers must have at least $100,000 in capital, excluding their property assets.

Retailers are also banned from operating as a wholesaler, the decree says. (das)