Government to shorten negative investment list

JAKARTA (JP): The government is planning to shorten the country's negative investment list as part of a new investment policy initiative to secure a US$600 million loan from the Asian Development Bank (ADB), according to Chairman of the Investment Coordinating Board (BKPM) Theo F. Toemion.

Speaking in a press conference on Tuesday, Theo declined to name which sectors would be excluded from the negative investment list, but said that the government was considering opening up the domestic broadcasting and media industry to foreign investors.

Theo said that the reason behind the inclusion of the media and broadcasting sector in the list in the past was because the government was afraid of foreign domination in news broadcasting.

"But now there are broadcasters from Singapore using Bahasa Indonesia and aiming at Indonesians, seeing that, do we really need to close off the sector?" he said.

Theo said that the negative investment list itself was still needed to protect small and medium enterprises.

He said that other than those directly involved in the development of small and medium enterprises, the sectors in the current negative list may be removed.

The government's negative investment list regulates the amount of foreign investment allowed in a sector.

In the latest negative list based on a presidential decree dated July 20, 2000, foreign investors are banned from owning natural forest concessions, cultivation of sperm plasma, and owning logging contracts.

Foreign investors are also banned from owning taxis and buses, public sea transportation, broadcasting and media and the film industry.

They are also banned from trade and trade related services except for large scale retailers, wholesalers, exhibition and convention services, quality certification services and market research services.

Sectors that allow up to 95 percent ownership by foreign investors include port development and management; production, transmission and distribution of electricity; shipping; the processing and distribution of clean water for the public; public trains; atomic power plants and medical services.

Sectors that allow up to 49 percent ownership by foreign investors include the telecommunications sector and airlines which operate both scheduled and unscheduled flights.

The list is updated annually.

The government has disclosed, on numerous occasions, the content of the new investment policy initiative which covers simplification in the procedure for obtaining investment licenses, easing of requirements in employing expatriates and opening up the domestic banking sector to foreign investors.

Theo said that a new investment law was currently being drafted to provide equal treatment to domestic and foreign investors.

He said that the draft would be presented to the House of Representatives early in November.

"After we have finished with the draft, we will move on to shortening the negative investment list," he said.

Separately, State Secretary Bambang Kesowo said that the government's move to give equal treatment to domestic and foreign investment was crucial to guarantee that the Indonesian investment climate remained conducive.

Bambang also said that the government would review the investment policy in the country's mining sector particularly regarding the obligation of foreign mining companies operating in the country to divest up to 51 percent ownership to local investors after operating for 10 years. (tnt/dja)