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Indonesia plans to unlock more sectors of its economy to overseas investors, including health care, agriculture and creative industries, but will not allow foreign investment in telecommunication towers, the head of the country’s Investment Coordinating Board said on Friday.

Gita Wirjawan, head of the board, known as the BKPM, said a draft on foreign investment in strategic areas, known as the “negative investment list,” had been finalized and should be approved soon.

There has been fierce resistance from local vested interests to proposals to open up multi­billion-dollar investment in such areas as base towers for mobile phones, and there could still be other late changes in the draft.

“We have finalized the draft and by the end of this month ... we should have it signed by the president,” Gita said late on Friday.

In health care, foreign investors would be allowed to own up to 67 percent of hospitals across the country, he said. Previously, foreign ownership in hospitals had been restricted to a few cities such as Surabaya, East Java, and Medan, North Sumatra.

Foreign companies will also be allowed to have a maximum ownership of 49 percent in plantations producing staple foods such as rice, as well as cargo services and film businesses, added Gita, a former investment banker with JPMorgan and Goldman Sachs.

“We actually also agreed on up to 49 percent foreign ownership in education institutions. But since education institutions must be nonprofit entities, as the law says, then it may be hard for foreigners to set up nonprofit education institutions,” he said.

“As for telecommunication towers, we have agreed to keep it shut,” said Gita, who was appointed last year by President Susilo Bambang Yudhoyono with a mandate to boost investment.

After these revisions, about 23 sectors will remain closed to overseas investors, including radio and television and alcoholic beverages, Gita said.

Indonesia faces stiff competition from regional rivals such as Vietnam and China in attracting foreign direct investment. Investors often complain about obstacles such as tortuous red tape, widespread corruption and a shaky legal system.

Southeast Asia’s largest economy has set a target of lifting foreign direct investment by 15 percent this year, after it attracted about $10 billion last year.

Gita has previously said Indonesia should be able to achieve a “sweet spot” of total investment of $25 billion to $35 billion a year.



Reuters