Tue Dec 24, 2013 3:11am EST
<span id="articleText"/>* Indonesia amends 'negative investment list' to lure investors
<span id="midArticle_0"/>* Eases investment rules for power plants, advertising, pharma
<span id="midArticle_1"/>* Maintains regulations on airports, ports (Adds details on regulation changes, companies, reaction)
<span id="midArticle_2"/>By Rieka Rahadiana
<span id="midArticle_3"/>JAKARTA, Dec 24 (Reuters) - Indonesia announced on Tuesday it will allow increased levels of foreign investment in the country's power plants, advertising, and pharmaceutical industries as part of government efforts to boost the slowing economy.
<span id="midArticle_4"/>Policymakers are scrambling to tempt back jaded investors who have fled Southeast Asia's largest economy due to the country's sizable current account deficit, which has helped make the rupiah skid more than 20 percent against the dollar this year.
<span id="midArticle_5"/>Indonesia fears further foreign outflows due to political uncertainty ahead of next year's elections and the reduction of U.S. monetary stimulus, which long fuelled demand for risky assets in emerging markets.
<span id="midArticle_6"/>"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," Chief Economic Minister Hatta Rajasa told reporters.
<span id="midArticle_7"/>After months of delays, ministers amended Indonesia's "negative investment list" of sectors in which foreign investors are either barred or restricted. The list, which has existed for decades, limits foreign involvement in areas deemed sensitive.
<span id="midArticle_8"/>No date was given on when the changes will become effective since President Susilo Bambang Yudhoyono must still formally sign the decree.
<span id="midArticle_9"/>"This (list) will boost the investment climate during a political year, providing more legal certainty from a better negative investment list," said Sofjan Wanandi, head of the Employers' Association of Indonesia (APINDO).
<span id="midArticle_10"/>Under the new policy, the government increased the maximum foreign investment in pharmaceutical companies to 85 percent from 75 percent, and in advertising agencies to 51 percent from 49 percent.
<span id="midArticle_11"/><span id="midArticle_12"/>MORE COMPETITION?
<span id="midArticle_13"/>That means more competition could be in store for Indonesian pharmaceutical firms Kimia Farma, Indofarma and Kalbe Farma, as well as for advertising agency Fortune Indonesia.
<span id="midArticle_14"/>Indonesia also allowed foreign investment of up to 100 percent from 95 percent for power plant projects carried out as a public-private partnership. Under the partnership terms, a foreign investor now can own an entire power-plant during a concession period, after which some equity transfers to the government.
<span id="midArticle_15"/>At the last minute, the government dropped its earlier proposal to let foreign investors to fully operate airports and ports, dealing a blow to India's GVK Power & Infrastructure , South Korea's Incheon International Airport Corp and others looking for a bigger presence in Indonesia.
<span id="midArticle_0"/>Economists said the changes were a good first step to attracting investment, but more was needed.
<span id="midArticle_1"/>"The main problem is not the variation in investment types, but how comfortable for them to invest in Indonesia," said Lana Soelistianingsih, chief economist at Jakarta-based fund manager PT Samuel Aset Manajemen.
<span id="midArticle_2"/>The World Bank and International Monetary Fund earlier this month warned the world's fourth most populous country to implement more profound economic reforms if it has any hope of returning to stronger growth. (Additional reporting by Adriana Nina Kusuma and Andjarsari Paramaditha; Writing by Randy Fabi; Editing by Richard Borsuk)
<span id="midArticle_3"/>
<span id="articleText"/>* Indonesia amends 'negative investment list' to lure investors
<span id="midArticle_0"/>* Eases investment rules for power plants, advertising, pharma
<span id="midArticle_1"/>* Maintains regulations on airports, ports (Adds details on regulation changes, companies, reaction)
<span id="midArticle_2"/>By Rieka Rahadiana
<span id="midArticle_3"/>JAKARTA, Dec 24 (Reuters) - Indonesia announced on Tuesday it will allow increased levels of foreign investment in the country's power plants, advertising, and pharmaceutical industries as part of government efforts to boost the slowing economy.
<span id="midArticle_4"/>Policymakers are scrambling to tempt back jaded investors who have fled Southeast Asia's largest economy due to the country's sizable current account deficit, which has helped make the rupiah skid more than 20 percent against the dollar this year.
<span id="midArticle_5"/>Indonesia fears further foreign outflows due to political uncertainty ahead of next year's elections and the reduction of U.S. monetary stimulus, which long fuelled demand for risky assets in emerging markets.
<span id="midArticle_6"/>"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," Chief Economic Minister Hatta Rajasa told reporters.
<span id="midArticle_7"/>After months of delays, ministers amended Indonesia's "negative investment list" of sectors in which foreign investors are either barred or restricted. The list, which has existed for decades, limits foreign involvement in areas deemed sensitive.
<span id="midArticle_8"/>No date was given on when the changes will become effective since President Susilo Bambang Yudhoyono must still formally sign the decree.
<span id="midArticle_9"/>"This (list) will boost the investment climate during a political year, providing more legal certainty from a better negative investment list," said Sofjan Wanandi, head of the Employers' Association of Indonesia (APINDO).
<span id="midArticle_10"/>Under the new policy, the government increased the maximum foreign investment in pharmaceutical companies to 85 percent from 75 percent, and in advertising agencies to 51 percent from 49 percent.
<span id="midArticle_11"/><span id="midArticle_12"/>MORE COMPETITION?
<span id="midArticle_13"/>That means more competition could be in store for Indonesian pharmaceutical firms Kimia Farma, Indofarma and Kalbe Farma, as well as for advertising agency Fortune Indonesia.
<span id="midArticle_14"/>Indonesia also allowed foreign investment of up to 100 percent from 95 percent for power plant projects carried out as a public-private partnership. Under the partnership terms, a foreign investor now can own an entire power-plant during a concession period, after which some equity transfers to the government.
<span id="midArticle_15"/>At the last minute, the government dropped its earlier proposal to let foreign investors to fully operate airports and ports, dealing a blow to India's GVK Power & Infrastructure , South Korea's Incheon International Airport Corp and others looking for a bigger presence in Indonesia.
<span id="midArticle_0"/>Economists said the changes were a good first step to attracting investment, but more was needed.
<span id="midArticle_1"/>"The main problem is not the variation in investment types, but how comfortable for them to invest in Indonesia," said Lana Soelistianingsih, chief economist at Jakarta-based fund manager PT Samuel Aset Manajemen.
<span id="midArticle_2"/>The World Bank and International Monetary Fund earlier this month warned the world's fourth most populous country to implement more profound economic reforms if it has any hope of returning to stronger growth. (Additional reporting by Adriana Nina Kusuma and Andjarsari Paramaditha; Writing by Randy Fabi; Editing by Richard Borsuk)
<span id="midArticle_3"/>
- Link this
- Share this
- Digg this
- Reprints
via Smart Health Shop Forum http://feedproxy.google.com/~r/SmartHealthShopForum/~3/vq-aHHwUSJQ/16152-update-1-indonesia-eases-foreign-investment-rules-boost-economy.html
No comments:
Post a Comment