Thu, 29 May 2003

RI opens the door to further ASEAN investments

Evi Mariani, The Jakarta Post, Jakarta

Indonesia has fully phased out its temporary exclusion list (TEL) in the industrial sector for investment from Association of Southeast Asian Nations (ASEAN) member countries in 2003, and is ready to do the same for four other sectors -- agriculture, mining, forestry and fishery -- by 2010, in accordance with the ASEAN Investment Area (AIA) protocol.

The AIA protocol requires ASEAN members to liberalize the five sectors mentioned above and business services related to those sectors for ASEAN direct investments by 2010 and for non-ASEAN investments by 2020.

Director of Regional Cooperation for the Investment Coordinating Board (BKPM) Rizar Indomo Nazaroedin said that earlier this year, the country phased out the pesticide industry from the TEL.

The step has opened the sector to foreign direct investment from the other nine ASEAN member countries.

As for the four remaining sectors, Rizar explained that there was a possibility that the government would open them before 2010, but he could not provide a timeframe.

"BKPM's job is to promote investment, but it doesn't have the authority to determine which sectors are to be opened first," he said. "It is the ministries, like the agriculture, forestry or mining ministries, who have the authority."

He added that BKPM planned to hold an inter-ministerial meeting by the end of June to discuss matters related to the AIA protocol.

"However, Indonesia has not opened certain industries included in the sensitive list or the negative investment list, such as the arms industry," he said.

Included in the negative investment list as stipulated by Presidential Decree No. 96/2000 are, among others, industries producing weapons and related components, cyclamate, saccharine and alcoholic drinks.

In sectors other than the manufacturing industry, natural forest concessions, mining of radioactive minerals and collecting or utilizing sponges are also included on the negative investment list.

The AIA protocol was endorsed in September 2001 in order to increase foreign direct investments from ASEAN as well as non- ASEAN countries by liberalizing the region and raising its competitiveness.