KATADATA - Indonesian government is considering to open up its modern retail sector to foreign investors. Head of the Investment Coordinating Board (BKPM) Franky Sibarani said at the Coordinating Minister for Economic Affairs office on Monday (1/18) that many foreign investors are interested to invest in the sector.
If the proposal is approved, it will be included in the revision of the Presidential Regulation No. 39 of 2014 on List of Business Sectors Closed to Investment and Business Open with Condition to Investment. According to Sibarani, foreign investment will help increase the capital of local retailers.
Until now, three types of modern retail are still closed to foreign investors. They are department store (2,000 square meters of floor space), supermarket (1,200 m2) and minimarket (400 m2). Even if the government later decides to open the sector, it will not allow 100 percent of foreign ownership. “If it was opened, (foreign ownership) will be limited to 33 percent. Local (retailers) can partner with foreign (investors) to increase their investments. But it has not been decided yet,” said Sibarani.
The government’s plan to open up modern retail sector to foreign investors may stir controversy. After all, the Ministry of Trade which is responsible for the sector is against the plan. Director General of Domestic Trade Srie Agustina said that the government should encourage foreign investment in the production sector instead. “Small retail sector should only be opened to local players,” she said.