Indonesia under fire for FDI restrictions

Author: Brian Yap | Published: 12 Jul 2017

Indonesia has come under criticism for its failure to further reduce foreign direct investment (FDI) restrictions, with Indonesian counsel calling for more transparent and consistent policy implementation.

In its June 2017 Indonesia Economic Quarterly report, the World Bank notes that, based on investment policy data collected, the country’s negative investment list (DNI) has and continues to pose a significant deterrent to FDI. It argues that several major DNI restrictions, including domestic content requirements and foreign equity limits, have been stifling FDI into the country.

But lawyers in Indonesia point to a different issue concerning the significant lack of coordination between the government and relevant state bodies in implementing new FDI relaxation measures.

"The government should make sure that, upon issuing a new DNI, all new requirements are clear, and that the investment coordinating board BKPM and relevant ministries are consistent when implementing policies," said Mita Djajadiredja, senior partner at...