Spurring creativity: Creative Economy Agency (Bekraf) vice chairman Ricky Pesik (right), accompanied by deputy for marketing Joshua Simandjuntak, speaks during a visit to The Jakarta Post office on Wednesday
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The Creative Economy Agency (Bekraf) has supported the proposal made by the Investment Coordinating Board (BKPM) to open cinema chain businesses to foreign investors, saying that the involvement of foreign investors would help develop the country's cinema industry.
The agency's vice chairman Ricky Pesik said in Jakarta on Wednesday that the agency, and the BKPM, which is in charge of revising the foreign investment policy, had met several times to discuss the possibility of allowing foreigners to enter the cinema business.
'We support the plan to give foreign investors a chance to invest in the cinema business,' he said during a discussion with editorial staff of The Jakarta Post on Wednesday.
At present, foreign direct investment is only allowed to account for 49 percent stake in companies providing technical assistance in movie related production.
According to Presidential Regulation No. 39/2014 on negative investment list, cinema operators, film production houses, film distribution and film and movie promotion are still closed to foreign investment.
However, according to the capital market regulation, foreign investors can buy shares of cinema operators listed on the local stock exchange. The publicly listed Graha Layar Prima, known for its Blitzmegaplex cinema chain, is partly owned by a South Korean company.
Ricky said that many Indonesian film industry stakeholders had demanded that the cinema business be opened for foreign direct investment to help address the shortage of cinemas in the country.
He said that there was still a wide gap between the number of Indonesian viewers and the cinemas available because local investors lacked the funds to enter the capital intensive cinema chain business.
Indonesia has 1,054 screens nationwide, with privately owned Cinema 21 owning the majority, with 823 screens in 152 theaters. Most cinemas are concentrated in the Greater Jakarta region.
With a national population of nearly 250 million people, there is one screen for every 237,000 people, a stark difference compared with Malaysia where each screen caters to between 39,000 to 40,000 people.
President Joko 'Jokowi' previously claimed that Indonesia needed to have 5,000 to 6,000 screens.
Ricky also said if foreign companies were allowed to operate cinema chains in the country, Indonesian movies should account for at least 60 percent of the total showing time for six consecutive months as stated on the existing cinema regulation.
Meanwhile, BKPM head Franky Sibarani said Tuesday that the agency was currently discussing the plan with related agencies such as Bekraf, which had proposed that foreign investors be allowed to own up to a 51 percent stake in cinema operators.
'All of the suggestions will be examined and discussed together, in the national interest and future position of Indonesia,' he said.
The BKPM has so far received 454 recommendations from a number of institutions regarding the proposal to open the cinema operator business to foreign investors. In addition to the cinema businesses, the BKPM is also studying proposals to open up several other industries such as the fisheries processing industry. The BKPM hopes the newly revised Negative Investment List will be issued in the middle of next year. (fsu)
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