Jakarta opens up to foreign interests

OPEN up the Indonesian economy to attract investment and face up to competition from China, urged Mr Jusuf Wanandi, and shortly after, Jakarta threw its doors open to foreign investors.

The Indonesian State Secretary Murdiono announced yesterday that foreign interests would be allowed to own Indonesian companies fully. Minimum capital requirements were also removed.

While Mr Wanandi’s responses to questions preceded the announcement, he laid the groundwork for its arrival. He said that the diversion of investment from Indonesia to China would have the effect of making Jakarta open up its economy further.

“It is good pressure. We have to keep up with the competition to liberalise our economy quicker.”

He was upbeat about Indonesia’s chances despite a 22-per-cent drop in foreign-investment approvals last year.

He said that Beijing was only attracting investments from Hongkong and Taiwan. There was also uncertainty as to how the Chinese economy would develop. “To be frank, I am not so pessimistic that we cannot compete with the Chinese in the long term.”