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View all search resultsRetail, distribution should be put on negative list: Apindo
The Indonesian Employers Association (Apindo) has demanded that the government include retail trade and distribution onto the revised negative investment list slated for introduction in the near future
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T
he Indonesian Employers Association (Apindo) has demanded that the government include retail trade and distribution onto the revised negative investment list slated for introduction in the near future.
Apindo chairman Sofjan Wanandi said the arrangement was necessary to maintain business opportunities for local businesspeople.
Domestic players consider the two areas of investment as vital for the economy, which relies heavily on domestic consumption.
'In terms of manufacturing, we see we've lost out to the competition, partly due to a lack of capital and technology. What can we control at home if we can't keep the distribution for our own businesspeople?' he told reporters during a press conference in Jakarta on Friday.
While Apindo expected the government to bestow full ownership in the two areas to only the local business community, the final measure would be requiring foreign investors to set up a joint venture with local partners, according to Sofjan.
Sofjan said the government should learn a lesson from the consequences of opening the banking sector. The policy drew sizable inflows of foreign investment and allowed massive penetration by foreign banks but failed to ensure reciprocity, to allow Indonesian banks to be treated the same abroad, such as in Singapore and Malaysia ' which apply stricter requirements.
Negative investment, which was last updated in 2010, defines sectors that are wholly closed to foreign investment or allows restricted foreign ownership.
Investment Coordinating Board (BKPM) chief Chatib Basri recently said that the new list would provide greater flexibility for more foreign investment in the service sector, but did not provide further details.
Apindo's deputy chairman, Franky Sibarani, said the negative list should include key retail trade covering motorcycles, food and beverages, textiles, garments, footwear and cosmetics.
At present, the list is limited to retail sales of automobiles and spare parts, meaning that investment in the trading of other products is totally open to foreign firms.
Foreign firms were present in the sales of the goods under the proposed expansion to the list, but only to a minor extent, according to Apindo.
'Regulating these areas of trade will help maintain the competitive edge of products that we produce domestically,' Franky told The Jakarta Post.
Apindo also expected the government to place a foreign ownership cap on investment in logistics, a part of the distribution sector, in the revised negative list, Franky added.
Indonesia is scheduled to ratify the eighth package of the ASEAN Framework Agreement on Services (AFAS) this year, while also progressing with another two packages of similar agreements through 2015, when a regional single market is established.
Franky said the government should not propose new liberalization commitments in the upcoming AFAS negotiations but instead should disseminate information about the deals already made to local business players, who had little awareness of the issue. So far, Indonesia had agreed on around 80 items in services open for trade and investment, according to Franky.
