Negative investment list revised for clarity

Andi Haswidi, The Jakarta Post, Jakarta

The government revised its so-called negative investment list -- a list of business sectors, wholly or partly closed to investment -- last week, aiming to clarify rules and fair treatment within the business community.

A copy of the list obtained by The Jakarta Post on Thursday, basically separates business sectors closed to both local and foreign investment, and those open to investment with certain conditions.

On the closed side, the government scrapped two of 25 sectors; the installation and maintenance of roads, and non-ferrous metals industry or lead.

The remaining 23 were left intact, which included gambling, public broadcasting services, motor vehicle test operators and air traffic service providers.

As for the list of business sectors open to investment with conditions, the government has shown its stance in protecting small businesses by making no changes within the sub-sector reserved for small and medium enterprise businesses.

In response to a request from business operators grouped under the Indonesian Chamber of Commerce and Industry (Kadin), the government made considerable revisions to sub-sectors including capital ownerships, allowed business locations and list businesses reserved for 100 percent domestic ownership.

In capital ownership, the government scrapped 15 out of 17 businesses in the arts and culture sector, leaving only art galleries and art performance venues, where a minimum of 50 percent domestic ownership was still required.

In the capital ownerships category, the government also scrapped in the list business and management consultation services, in which foreign investment was previously limited to 49 percent -- now completely open, but lowered foreign ownership in crossing transport services from 60 percent to 49 percent.

With the change, foreign ownership is now limited to 49 percent in 29 lines of businesses within the transportation sectors named in the list, but this will be subjected to further revisions as soon as the House of Representatives passes its transportation bill, which promises more liberalization in the sector, at some stage in 2008.

A massive change appeared in the permitted business locations category, which previously regulated the locations of 19 lines of businesses; now there is only one -- breeding and farming pigs, which must heed regional regulations.

The previous 19 businesses included hotels, caterers, spas, game makers, karaoke establishments, restaurants, nursing services and travel bureaus.

Finally, in the list of industries for domestic investment only category, the number of items stays roughly the same, except in the retail sector, which stipulates 100 percent domestic ownership for supermarkets on less than 1,200 square meters of land, department stores on less than 2,000 square meters, community and convenience stores, 200 square meters.

There has been no formal response as yet from Kadin, which said it had not receive the revised list yet. (adt)