Indonesia's FDI liberalisation falls short

Author: Brian Yap | Published: 16 Feb 2016

Indonesia has unveiled a plan to bring about a big bang in its semi-closed economy, as the county’s new leadership seeks to rev up its deregulation drive and put its protectionist history behind it.

Last Thursday the Widodo administration announced its decision to remove 35 business lines from its Negative Investment List (DNI), which shows sectors that are closed or conditionally open to foreign direct investment (FDI).

But local counsel say the push for deregulation has fallen short of a big bang effect, labelling it a positive development that remains far from the desired target.

"What I see is that this is not liberalisation and is instead a process that the government is taking to allow more foreign investment to come to Indonesia," said  Harun Reksodiputro, partner at Ginting & Reksodiputro in Jakarta.

Reksodiputro adds that the two main reasons behind the concurrent lifting and imposition of caps...