http://www.stasiareport.com/the-big-...ments-20131107
INDONESIA plans to allow foreign investors to wholly run airports and seaports as part of a liberalisation of investment regulations, officials said, on a day when South-east Asia's largest economy reported that growth had slowed to a four-year low.
Coordinating Economic Minister Hatta Rajasa and Investment Coordinating Board (BKPM) chief Mahendra Siregar also announced proposals to ease caps on foreign ownership in sectors including pharmaceuticals, joint-venture financing companies, ecotourism, telecommunications, advertising and vehicle-licensing.
The moves are aimed at securing capital inflows into an economy that has been under pressure from the recent global slowdown.
"We want to make it easier for investors," Mr Rajasa said.
Yesterday, the government said economic growth in the third quarter slowed to 5.6 per cent over the same period last year.
The sectors to be opened up also include those likely to grow rapidly in coming years, such as travel, consumption and health care.
These changes, which require the approval of President Susilo Bambang Yudhoyono, come at a sensitive time. Elections for Parliament will take place in April and presidential polls in July, and though Dr Yudhoyono cannot run again by law, his party's fortunes are expected to take a dip.
Mr Mahendra said that foreign investors will be allowed to take a 100 per cent stake in airport operations, from zero now, but airport ownership will stay public.
Existing curbs, he said, had hindered investment in proposed new airports in the north of the resort island of Bali, as well as in the cultural city Yogyakarta, where existing airports are overstretched.
Under the proposals, foreigners will also be allowed to own a stake of up to 85per cent in pharmaceutical and venture-capital companies, up from 75 per cent at present, and up to 70 per cent in ecotourism companies, up from 49 per cent.
They can also own stakes of up to 65 per cent for fixed-line and cellphone companies, and up to 49 per cent for ground and freight terminals, as well as film distribution and vehicle-testing companies. Investors from South-east Asia can own up to 51 per cent in advertising companies.
Mr Raj Kannan, managing director of infrastructure consultant Tusk Advisory, told The Straits Times the news was "timely", as major airports and ports are in need of competition to improve performance and service levels.
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