Tue, 15 Aug 2000

President asked to lift investment ban on dot-coms

JAKARTA (JP): State Minister of Investment and State Enterprises Development Rozy Munir is asking President Abdurrahman Wahid to revise his controversial decree which bans foreign investment in the multimedia and telecommunications sectors, a senior official of the office of the state minister said on Monday.

Deputy minister for communications and the media Riza Primadi said the minister planned to send a letter to the President on Tuesday to officially ask for a review of the decree.

"We expect the President to quickly revise the decree. The new, revised, decree is expected to be issued before Sept. 8, the date when the new Telecommunications Law will come into force," he said.

He said the new decree would delist multimedia businesses from the negative lists for foreign investments.

"Internet-related business will be open to all foreign investors. There'll be no restriction whatsoever," he said.

Presidential Decree No. 96/2000, dated July 20, prohibits nonexisting foreign investors from investing in the country's "information multimedia" businesses.

The decree does not provide details on the information multimedia sector but officials later confirmed that it included Internet service providers (ISPs), Internet content providers, portals and e-business service companies.

The government earlier defended its move, saying that the ban was meant to delay a slew of foreign Internet players from flocking into the local market so that local companies would have more time and room to develop and strengthen their positions.

Riza said his office was also asking for the revision of the decree, particularly to allow foreign investors to own up to 95 percent of local telecommunication firms.

Under the decree, foreign investors are only allowed to have up to a 49 percent stake in local telecommunication companies.

He said the call for a revision was jointly made by some government institutions involved in an interdepartmental meeting on Monday to discuss the mounting criticism from existing local and foreign Internet players.

Local and foreign Internet businesses have been protesting the ban, calling it a blunder and a disaster for the country's Internet industry.

At present, major existing Internet-based companies, including Agrakom, Catcha and Astaga!com are controlled by foreign investors. (cst)