Foreign capital could improve local press, experts say

The Jakarta Post ,  Jakarta   |  Sat, 06/03/2006 1:57 PM

The Jakarta Post, Jakarta

Deregulating the media to allow foreign investment could have a positive impact on the industry nationwide, some practitioners say.

""Any amount of foreign investment in our media companies indicates the level of the international community's trust in us. The more open the regulatory system, the better the freedom of the press would be,"" said Mahtum Mastoem, chief of the Association of Newspaper Publishers.

""The deregulation of foreign investment (in media) could also increase the level of competitiveness here, and people in favor of democracy would also like this,"" Mahtum said.

Laws already regulated the percentage of local and foreign content allowed in media -- and this also applied to local companies with foreign shareholders, he said. This meant consumers here would not have to worry about being flooded by overseas content.

Mahtum said the abolishment of publishing permits at the beginning of the reform era had created more opportunities for local newspapers to grow. The 1999 Press Law marked a new era of the free press here, he said.

""Before the reform era, we had 292 print media publications. After, the amount grew to about 2,000. Now, the number of surviving print media, such as newspapers, tabloids and magazines, is 829,"" Mahtum said.

""There also used to be regulations on the amount of pages and advertisements allowed in newspapers. Moreover, publications were required to state the names of all the editorial staff,"" he said.

The further deregulation of print media could improve the media's critical ability, especially its ability to scrutinize the government, he said.

Until now, international publications like magazines have entered Indonesia through a franchise system, so foreign investors do not directly own local media companies.

However, monitoring foreign minority share holding in local media companies is difficult because of the lack of clear regulations governing the investment.

The Broadcasting Law stipulates that foreign investment in local broadcasters should not exceed 20 percent, while the Press Law stipulates that foreigners acquiring shares in local media through the capital markets should not become majority shareholders.

Another proponent of deregulation, press council member and senior journalist Leo Batubara, said international investment in media companies would encourage competency among local media professionals.

""However, foreign companies are still reluctant to invest here, especially in print media companies, because there is no certainty in the law and politics,"" he noted.

Rupert Murdoch's Hong Kong-based satellite and cable operator Star TV recently bought a 20 percent stake in local broadcaster ANTV for a reported US$20 million, a move which was criticized by some in the local industry, who saw the move as an attempt by foreign companies to control media here.

The government later announced it would verify the existing ownership structures of local broadcast media to ensure foreign stakes did not exceed the 20 percent threshold.

A media expert from Moestopo University, Gati Gayatri, cautioned that the jury was still out about the influence of foreign investment on the industry.

""It will take further research ... to see whether the impact is more negative or positive"" she said.

Even less upbeat about deregulation of the media was Masfendi of the Indonesian Journalists Union.

He said if foreign investors were given free reign in local markets, giant multinational companies could easily buy up and strengthen local media and eat up their competitors' market shares.

The power they would have, meant the multinationals could end up influencing local politics, he said.

""Many of our local media companies could go bankrupt due to their inability to compete financially,"" he said. (03)

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