Indonesia to open economy to foreign investment
Indonesian President Joko Widodo on Wednesday unveiled plans for a "big bang" loosening of restrictions on foreign investment in nearly 50 sectors of the economy to encourage competition.
Widodo's proposal, which will ease rules in the e-commerce, retail, health care and movie industries, is the most far-reaching yet in a string of stimulus packages rolled out over the past six months to arrest a slowdown in growth.
Southeast Asia's largest economy which has been growing at its slowest pace in six years because of falling commodity prices and cooling growth in major trading partner China.
But Widodo told Reuters in an interview at the presidential palace he was very optimistic that growth would rebound to 5.3 per cent this year after a slide to 4.8 per cent in 2015.
His trade minister, Tom Lembong, told Reuters that the sweeping changes planned for the so-called 'Negative Investment List" signalled a greater openness to foreign investment and would partly prepare the country for free trade agreements, including eventually the Trans-Pacific Partnership (TPP).
"We are seriously considering deregulation across the board, but focusing on e-commerce, health care, and creative industry," Widodo said ahead of a cabinet discussion of the proposals.
"There are 49 sub-sectors (that will be affected) so in my opinion this is the big bang." Lembong said separately that retail was also among the sectors that would be opened up under the plan.
He said there would be an opening up to some degree in each of the 16 main sectors in the negative investment list, which include agriculture, forestry, energy, communication and transport. In some cases this would raise the limit on foreign investment stakes in companies from a minority to a majority.