The government of Indonesia announced on Tuesday (24/12) that increased levels of foreign direct investments will be allowed in the country’s airports, pharmaceutical industries, power plants, and toll roads. The revision of Indonesia's Negative Investment List (Daftar Negatif Investasi), the list which stipulates which sectors are closed (or partly closed) to foreign investment, is conducted in order to attract more foreign investments from abroad as a means to combat slowing economic growth in Southeast Asia's largest economy.
“The commitment is to maintain Indonesia’s economic growth and anticipating a slowdown in the global economy by encouraging investment, particularly in domestic and foreign investment,” said Economic Minister Hatta Rajasa.
Total realized investments in Q3-2013 rose 22.9 percent (yoy), which is about two percent lower than the growth pace in the second quarter of 2013. Slowing investment growth is one of the reasons why Indonesia's economy has been slowing down. The country's economy grew 5.62 percent in Q3-2013 (yoy), implying the fifth consecutive quarter of slowing economic growth.
Head of the Indonesia Investment Coordinating Board (BKPM), Mahendra Siregar, stated that under the new policy, the government raises the maximum ratio for foreign investment in pharmaceutical companies from 75 percent to 85 percent and for advertising up to 51 percent.
More details, including those for the other industries, are expected in a later stage.