JAKARTA (JP): The government will adhere to the existing agrarian law that bans foreign land ownership but is considering easing housing laws for foreigners in an effort to attract more investment.

"Based on our Agrarian Law No. 42 of 1960, foreigners are not allowed to own land here but they have rights to use," Minister of Agrarian Affairs/Chairman of the National Land Agency Soni Harsono said after meeting with President Soeharto at the Bina Graha on Thursday.

The Ministry of Justice and the Ministry of Agrarian Affairs are now examining the exact definition of what constitutes a home.

"We will have to get a clear-cut definition of what is considered a domicile. Whether it refers to residing in Indonesia, or to those holding permanent residence permits (KIM) or provisional residence permits (KIMS)," he said.

The government plans to allow foreigners and foreign institutional bodies to own apartments in Indonesia under some circumstances in the near future.

The plan is anticipating a possible increase in the number of high-income foreign workers here in line with Indonesia's economic growth.

"As long as the foreigners stay or the institutional bodies conduct their activities here, they will be allowed to own apartment units but not the land," Soni said.

With the pressure to revise the existing law, some ministries have proposed a bill that will allow foreigners not only to own apartments but also to use their land use permit as collateral, he added.

"We are still examining all aspects and possible impacts of the bill," Soni said.

Foreign investors may have doubts about investing their capital because land use rights cannot be used as a bank guarantee, he added.

"The bill on land use will allow foreigners to use and build on land for 25 years and to use this as collateral for bank loans," Soni said.

He said the state ministers of public housing and agrarian affairs and the minister of justice, together with the House of Representatives (DPR) are studying all aspects and possible impacts regarding the application of the bill. (prs)