Advertisement

Indonesia: a step in the right direction

Thirty-five sectors in Indonesia are to be opened up to full foreign ownership, while limits in dozens more will be raised.

Indonesia has announced that it will lift restrictions on overseas business ownership. Thirty-five sectors are to be opened up to full foreign ownership, while limits in dozens more sectors will be raised.

The changes, which have been discussed for months, were keenly awaited as a measure of whether President Joko Widodo is committed to major reforms in southeast Asia's most populous country. Over the last couple of years investors have become increasingly uncomfortable with Indonesia's slowing growth rate, which dropped to a six-year low in 2015.

Advertisement - Article continues below

"Investors and analysts welcomed the news, but some said the measures didn't go as far as they'd hoped," say Ben Otto and Anita Rachman in The Wall Street Journal. And certainly the changes aren't dramatic, Juniman, an economist at banking group Maybank, told the paper.

However, they are an improvement that will help to attract more foreign direct investment. But more significant than any direct impact is the fact that they represent "a welcome shift away from protectionism" something that the government has been flirting with in recent years, says Gareth Leather of Capital Economics. As such, they mark "another step in the right direction".

Advertisement
Advertisement

Recommended

Bullish investors return to emerging markets
Stockmarkets

Bullish investors return to emerging markets

The ink had barely dried on the US-China trade deal before the bulls began pouring into emerging markets.
27 Jan 2020
Commodities look cheap
Commodities

Commodities look cheap

Gold may be on a bull run, but industrial commodities, including copper, zinc and aluminium, remain cheap.
17 Jan 2020
Beware the hidden risks when investing in emerging markets
Investment strategy

Beware the hidden risks when investing in emerging markets

Emerging markets look cheap compared with developed countries, but earnings may be less trustworthy.
23 Dec 2019
Emerging markets: buy when the news is bad
Emerging markets

Emerging markets: buy when the news is bad

Emerging markets are being squeezed by local turmoil and by more general factors. But bad news can spell opportunity for investors.
5 Nov 2019

Most Popular

How “support” and “resistance” can help you spot trading opportunities
Sponsored

How “support” and “resistance” can help you spot trading opportunities

Technical analysis can help traders manage risk and decide where to enter and exit a trade. One simple form of technical analysis is the concept of “s…
6 Jul 2020
House price crash: UK property prices are falling – so where next?
Property

House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020
An economics lesson from my barber
Inflation

An economics lesson from my barber

On reopening his shop after lockdown, Dominic Frisby’s barber doubled his prices. It’s all part of the post-Covid inflation process – and we’re going …
8 Jul 2020