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I N V E S T M E N T
Parallel to the reform of the political system, Indonesia is steaming ahead to its
national economic development program, with an emphasis on job creation and making the market more efficient.
To help achieve the nation’s economic growth target of 6.6% for the period 2004-09, the Government of Indonesia
promotes both public and private investment including foreign direct investments. Over the five-year period the
Government has committed US$68.43 billion or 17% of the total required investments.
In the drive to improve Indonesia’s investment climate, three policy reform
packages were launched in the first half of 2006. The investment policy package (February 2006) covers the
following areas:
- general investment policies
- customs
- taxation
- the labor market
- small & medium size enterprises
The Infrastructure Development Package of March 2006 serves as the policy
framework for public private partnership and the risk sharing to speed up the infrastructure construction with
the help of the private sector. The Financial Sector Reform Package of July 2006 aims at improving coordinative
efforts of the government and the central bank, and strengthening the banking industry, non bank financial
institutions and the capital market.
To provide increased legal certainty, clarity, transparency and simplicity,
Indonesia has revised the Investment Negative List. The negative list comprises of a number of areas that are
closed for foreign investment and some areas, which are open to foreign investment, subject to certain conditions.
The negative list is relatively short, comprising only 1 per cent of all economic activity, or covering 25
industrial sectors. Inclusion of certain activities in the closed list is based on the criteria, such as health,
safety, defense and security, environment, culture and national interest.
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