Govt set to open up new sectors to foreigners

JAKARTA (JP): The government said on Thursday it would review the negative investment list, which catalogs business sectors barred to foreign investors, in an effort to provide wider investment opportunities.

State Minister of Investment and State Enterprises Development Rozy Munir said on Thursday his office proposed to reduce the list of sectors from 16 to seven.

He declined to disclose the sectors.

"I can't tell you now, wait until the President has his say on this. But one thing for sure is that business sectors related to explosive production are still closed to foreign investment," he said on the sidelines of a seminar on trade and investment.

The last negative investment list was issued in 1995 and it has not been revised since.

Sectors closed to capital investment wholly owned by foreign citizens or legal entities include airlines, port construction and operation, waterworks construction and operation, atomic energy, public railways, shipping and telecommunications.

Sectors closed to capital investment with partial foreign ownership include businesses which support domestic trade, local shipping, the operation of movie theaters, private television and radio broadcasting services, retail trade and taxi and bus transportation.

Sectors closed to foreign capital investment unless certain requirements are met include aircraft equipment and accessories, alcoholic beverages, ethyl alcohol outside of technical grades, explosives, fireworks, the manufacturing of powdered or condensed milk except when integrated with cattle breeding, the printing of valuable paper such as Bank Indonesia securities, duty stamps, passports or postage stamps, producing ordinary plywood except in Irian Jaya, and operating sawmills except in Irian Jaya.

A number of sectors are absolutely closed to foreign capital investment, including operation of casinos or gambling houses, the veneer industry, the processing of finished and semifinished products from mangrove wood, the pulp industry and sulfide processing, the processing of dichlorodiphenyl trichloroethane (DDT) and dieldrin and chloradane, the utilization and exploitation of sponges and the chlorofluorocarbon industry.

Several sectors on the list have already opened up to foreign investment. For example, the government has allowed foreign investors to participate in operating seaports and managing drinking water systems as part of its privatization program. (cst)