Editorial: Negative Investment Review a Big Positive
Foreign direct investment has been one of the key factors behind Indonesia's impressive gross domestic product growth over the past few years, with investors attracted by Indonesia's abundant opportunities and growing domestic market.
But as the external economic environment deteriorates and the domestic economy slows, the government is now reviewing the negative investment list to encourage greater investment flows.
According to Hatta Rajasa, the coordinating minister for the economy, the list will be less restrictive and more investor-friendly.
"We will report our progress to the president this November, and hopefully release the new list by the end of the year," Hatta said on Wednesday.
This move is very welcome, as the government must ensure it maintains the right investment environment now and in the coming months.
Among the opportunities closed to foreigners are investments in telecommunications towers, vessel traffic information systems, as well as timber and forest plantations, according to a presidential regulation issued in 2010.
If necessary, these sectors should be reviewed, especially if it helps to stimulate economic growth.
Mahendra Siregar, chairman of the Investment Coordinating Board (BKPM), also said his office had revised next year's investment target to Rp 450 trillion ($40.2 billion), down 12 percent from the initial target of Rp 506 trillion, due to the uncertainty of economic growth in emerging economies.
"It's still quite large, though. Our focus now is not to seek rapid acceleration, but to maintain our pace," Mahendra said.
For now, investments are continuing to flow and the economy is stable. But nothing can be taken for granted and it is reassuring to see the government is being proactive. Indonesia must be on guard against complacency as the situation can turn very rapidly.
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