Indonesia Announces “Big Bang” Opening Up Including Logistics, E-commerce Sectors

Indonesia’s President Joko Widodo unveiled plans this week for a “big bang” loosening of restrictions on foreign investment covering nearly 50 sectors of the economy – including the logistics sector – in order to stimulate economic expansion to reach a 7.0 per cent year-on-year gross domestic product (GDP) growth rate by 2019.

The changes to Indonesia’s Negative Investment List (Dafter Negatif Investasi) will impact the air cargo supply chain sector in the areas of Transport Supporting Services which will rise to a permitted 67 per cent foreign ownership (from 49 per cent), Warehouse Distributor up to 67 per cent (from 33  per cent), and Cold Storage which moves to 100 per cent (from 33 per cent).

Another key area being opened up to foreign ownership is the e-commerce sector. For foreign investors Indonesia’s e-commerce sector is an attractive market, with the Indonesian E-commerce Association (idEA) estimating that the number of online shoppers in Indonesia could reach 10 million this year as the country’s middle class continues to grow. The e-commerce business is projected to rake in Rp 20 trillion (US$1.49 billion) this year, double from last year’s estimated Rp 10 trillion.

(Logistics Insight Asia)