Indonesia to Ease Curbs on Foreign Investment as Growth Slows
Indonesia said it will allow foreign investment in airports and ports as the government seeks to revitalize an economy growing at the weakest pace since the global recession.
The country may also ease limits on overseas holdings in its telecommunications and pharmaceutical industries, the Investment Coordinating Board said today, hours after a report showed economic expansion slowed for a fifth quarter. Gross domestic product increased 5.62 percent in the three months ended Sept. 30 from a year earlier, as a declining rupiah restrained investment in Southeast Asia’s largest economy.
Indonesian policy makers are grappling with a depreciated exchange rate, elevated inflation and diminished foreign capital inflows undermining President Susilo Bambang Yudhoyono’s legacy of economic stability before he steps down next year. His failure to fix infrastructure gaps in his two terms has added to price pressures, threatening his party’s chances at elections in 2014.
“The dust has yet to settle on the slowdown definitely,” said Wellian Wiranto, a Singapore-based investment strategist at the wealth-management unit of Barclays Plc. “Hopefully it will be replaced by construction dust coming from new infrastructure investment if they stick to these opening up measures.”
The rupiah fell 0.5 percent to 11,415 per dollar as of 3:45 p.m. in Jakarta today, according to prices from local banks compiled by Bloomberg. It has dropped more than 15 percent this year, the worst performer among Asia’s 11 most-active currencies tracked by Bloomberg.
