Investment restrictions no longer needed: BKPM
Investment restrictions no longer needed: BKPM
JAKARTA (JP): State Minister of Investment Marzuki Usman
acknowledged on Friday the need to open a number of business
sectors currently included on the Negative Investment List.
Marzuki said a review of some business sectors currently
closed to foreign companies was necessary to boost foreign direct
investment.
"As the chairman of the Investment Coordinating Board (BKPM),
I would prefer that, if possible, there was no negative
investment list at all," he said. "At least we can provide a
clearer explanation of why we have to close certain sectors to
foreign investment."
The Negative Investment List, which catalogs business sectors
closed to foreign investment, was last issued in 1995 and has not
been updated since.
Sectors closed to capital investment wholly owned by foreign
citizens or legal entities include airlines, port construction
and operation, waterwork 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 cinemas, 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 drinks, ethyl alcohol outside technical grade,
explosives, firecrackers, the manufacturing powdered or condensed
milk except when integrated with cattle breeding, the printing of
valuable papers such as Bank Indonesia securities, duty stamps,
passports or postage stamps, producing ordinary plywood, except
in East Timor and Irian Jaya, and operating sawmills, except in
East Timor and Irian Jaya.
A number of sectors are absolutely closed to foreign capital
investment, including the 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.
For certain business sectors this policy is no longer
relevant. The government has, for example, allowed foreign
investors to participate in operating seaports and managing
drinking water as part of its privatization program.
Marzuki said a review of the closed sectors could only be done
in collaboration with related ministries, because they knew more
about the costs and benefits of lifting the restrictions.
He said more transparent investment procedures and wider
opportunities to invest in various sectors were expected to
attract more foreign investors to the country.
Foreign direct investment approved by the government in the
first six months of this year plunged by 77.5 percent to US$1.88
billion, from $8.35 billion during the same period last year.
(cst)