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Jakarta Post

Indonesia needs fewer foreign investors: PDI-P

  • Satria Sambijantoro

    The Jakarta Post

Jakarta   /   Thu, March 6, 2014   /  09:30 am

The Indonesian Democratic Party of Struggle (PDI-P) has vowed to curtail the country'€™s dependency on foreign investors, stating that the nation '€œneeds to stand on its own two feet'€ when making strategic economic decisions.

'€œWe are facing a situation in which our economic sovereignty and policies are being dictated by foreign powers,'€ the PDI-P stated in its economic platform for the 2014 elections.

The economic platform stipulates 19 points that should become the goal of PDI-P members who are expected to become lawmakers or policymakers in the next administration. In its platform, the PDI-P stated that Indonesia must limit foreign ownership in certain sectors, such as the banking industry. It also highlighted the need for Indonesia to push down its foreign debt, which the party argued had hit an alarming level.

'€œThe presence of several bylaws that harm national interests are the indirect result of the [influx of] foreign capital, with several cases showing that national interests have taken a back seat to foreign interests,'€ the party added.

The PDI-P is currently the country'€™s most popular party, as widespread dissatisfaction toward President Susilo Bambang Yudhoyono'€™s leadership has swung support to the opposition party, which has often criticized various policies implemented by the current administration.

The PDI-P has famously voiced its criticism every time the government floats the idea of increasing fuel prices, with the party once going as far as ordering its lawmakers to walk out in the middle of a House of Representatives plenary session in protest against the plan.

Nevertheless, the latest survey by Kompas shows that the PDI-P is the party to beat, as it is predicted to garner 21.8 percent of the vote in the upcoming general election, thwarting the ruling Democratic Party (PD), which is predicted to net only 7.2 percent.

The party is also leading the pack for the presidential post, as Jakarta Governor Joko '€œJokowi'€ Widodo, who is a PDI-P member, is predicted to grab 43.5 percent of the vote should he run in the presidential race, according to the survey. The PDI-P has yet to nominate its presidential candidate, with the final decision resting in the hands of party chairwoman Megawati Soekarnoputri, the daughter of Indonesia'€™s first president, Sukarno.

In terms of economic planning, the PDI-P will try to resurrect Sukarno'€™s viewpoints, with the party aiming for Indonesia to regain its sovereignty in politics, economics and social culture, according to Muhammad Prakosa, a party executive who is also head of the team that formulated the PDI-P'€™s economic platform.

Although Prakosa argued that the nation still needed foreign investors, nevertheless, the PDI-P believed that their investments must be regulated and selected accordingly to protect domestic interests. '€œSpecifically for the economy, [Sukarno] always pointed out the importance of us standing on our own two feet,'€ he noted.

Sukarno, who was known for his lenience toward '€œleftist elements'€, had a fondness for socialist policies. His close ties with leaders from Russia '€” then the Soviet Union '€” and China were believed to be the reasons behind his extreme hatred of foreign firms from the West, as he once lashed out with '€œgo to hell with your aid'€ to a US ambassador.

In stark contrast, Yudhoyono is seen as an ally to the US in his economic policies. In January, the President gave leeway for two US mining giants to sidestep the new Mining Law, as he lowered the required purity level for copper concentrate, allowing Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp., the biggest producers for copper here, to continue exporting their ores.

'€œThe Mining Law should have been imposed equally. Why should the government be lenient on Freeport and Newmont, which both originate from the US?'€ argued Dolfie Palit, a PDI-P lawmaker from House Commission XI overseeing finance.

Dolfie was also critical of the government'€™s move to allow foreigners to have greater control in certain industries in the revised negative investment list (DNI).

The new DNI, which is expected to be signed by the President soon, relaxes the foreign ownership limit in certain industries, with offshore-based investors slated to be able to own bigger stakes in sectors such as pharmaceutical and infrastructure, among others.

'€œThere should be thorough mapping in the DNI on which industries should be open to foreign investors, and which ones should be protected,'€ he said. '€œSome local industries might suffer due to the lack of support from the government.'€