At the end of November, Indonesia announced an additional 54 industry sectors as having been approved for 100% overseas ownership, including textile printing and weaving. Previously, overseas ownership has either been prohibited in such sectors or capped at 67%, according to HKDTC Research. The change was said to follow the revision of the Negative Investment List, one of the measures outlined in the country’s 16th Economic Stimulus Package.
However, only days after the announcement, AEC News Today has confirmed that Indonesia has done a U-turn on some of its promises in order to protect domestic SME businesses. The Ministry of Economic Affairs secretary Susiwijono Moegiarso told the media that foreign investment in fabric printing and weaving, as well as in a few other areas, had been scrapped. He told local media: “The goal is to protect the businesses of the small and medium enterprises.”
In the wake of the original announcement, Indonesian business groups raised fears such relaxed restrictions not only threatened micro, small, and medium enterprises, but also gave foreign investors privileges in key industries. Some industry bodies also expressed concern at the lack of consultation that took place before the government’s original decision was made.
Indonesian Employers Association (Apindo) chairman, Hariyadi Sukamdani told local media that the government had made little or no effort to consult the group before proceeding with its plan. Similarly, Indonesian Chamber of Commerce and Industry (Kadin) chairman Rosan P Roeslani said they had been unaware of the planned revisions to the DNI and called for a stop on its implementation.
Despite this, the general relaxation of foreign ownership rules still applies to 49 business sectors, with 100% foreign investment available in geothermal and telecommunications network enterprises.
