FOREIGN CAPS IN INDONESIA REMAIN OPAQUE

Indonesia’s Dutch legal structure has led to some confusion on the recently proposed changes in foreign investment caps. A 61-page regulation revealed earlier this month replaced a list compiled in 2001. The limit on foreign ownership of an insurer appeared to be reduced to 80% from 99%, although observers noted that many apparently liberal caps in Indonesia were meaningless if foreign players were unable to navigate Indonesian bureaucracy. In addition, legislation in Indonesia only covers a general policy direction. The president and his ministers then decide on specific implementation. An adviser to coordinating economy minister Dr Boediono said that about 111 subsectors were now more open, while 32 could be considered more restrictive, with the remaining 195 basically keeping their status quo. Meetings over the past month have been held between Dr Boediono and almost 100 business groups, and the details of the implementation for all industry sectors remains unspecific.