Luhut regrets govt ban on dot-com investors

JAKARTA (JP): Minister of Industry and Trade Luhut Pandjaitan said on Tuesday the recent ban of foreign investors in the country's nascent Internet sector was against the government's drive to attract foreign funds.

The minister said the policy was a mistake and should be reviewed if Indonesia really wants to win back foreign investors' confidence.

"It should not have happened at a time when we're actually striving to get foreign investors to return to the country. If it (the decree) only causes problem, we'd better revise it," he told journalists on the sidelines of the People's Consultative Assembly (MPR) Annual Session.

Luhut said he was not aware if the initiative to place the sector or Internet-based services on the negative investment list came from the Directorate General of Domestic Trade, which is under his control.

He said he would have to find out more information on the contents of the decree and to check whether his office was involved in the controversial policy.

Separately, the Forum of the Indonesian Internet Industry (FIII) also called on the government to revise the controversial decree by removing the sector from the negative list for foreign investment.

The forum said in a statement that the ban would only destroy the future of the country's Internet sector.

"Our Internet sector is still in the early development stages. If it can grow at such a rapid rate, that is because the players, most of whom are medium and small-scale enterprises, are getting financial and technological support from foreign investors," the forum said.

The government issued on July 20 Presidential Decree No. 96/2000, which states that some business sectors, including all Internet-related services such as Internet service providers, Internet content providers, portals and e-commerce service companies, are restricted from direct foreign investment.

The government issued a new investment policy last week banning the entry of foreign investors in the country's Internet- related companies.

Riza Primadi, the senior assistant on communications and media to the Minister of Investment and State Enterprises, earlier said that the restriction was important to protect the local dot-coms from foreign dominance.

He said the newly developed e-commerce business had been put on the negative list for foreign investment under a recommendation from the Directorate General of Domestic Trade of the Ministry of Industry and Trade.

However, FIII, which groups 36 local Internet-based firms, such as Agrakom, Asiapot.com and Indo.com, said the government should revise the decree and declare the Internet industry open to foreign investment.

"It is just impossible to support the Internet sector by protecting it from foreign investors. If the government really wants to help, it should open the industry up to foreign investors," the forum said. (bkm/cst)