OECD Investment Policy Reviews: Indonesia 2010
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OECD Investment Policy Reviews: Indonesia 2010

OECD Investment Policy Reviews: Indonesia charts Indonesia’s progress in developing an effective policy framework to promote investment for development. It focuses on policies towards investment, competition, infrastructure, finance and other areas of the business environment and suggests ways the climate for both domestic and foreign investment might be further improved.

It finds that Indonesia has undertaken a decade of political and economic reform, under very difficult circumstances. Democracy is now firmly established, and the economy is growing at a steady pace in spite of the global financial crisis. Reforms over the past decade have done much to improve the resilience of the Indonesian economy, and the government has made substantial progress in creating a better climate for investment. New laws have been enacted in almost all sectors, and new institutions have been created to advise the government, implement and enforce laws, regulate newly liberalised sectors and settle disputes.

Foreign investors have taken notice. Foreign direct investment in Indonesia in the past five years has exceeded the earlier peak achieved in 1996, before the Asian financial crisis in 1997-98 brought economic contraction and net outflows of foreign investment. This investment is also becoming increasingly diversified by sector and by country of investor.

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Publication Date :
01 Nov 2010
DOI :
10.1787/9789264087019-en
 
Chapter
 

Competition Policy You do not have access to this content

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Author(s):
OECD
Pages :
107–122
DOI :
10.1787/9789264087019-8-en

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Indonesia’s regulatory framework for competition has strengthened since the enactment of the first Competition Law of 1999 and the establishment of the Commission for the Supervision of Business Competition (KPPU) in 2000. The government has also implemented sectoral reforms to promote competition and productivity growth in sectors dominated by state-owned enterprises. This chapter examines the performance of KPPU in implementing the Competition Law over a decade and points out remaining challenges. The chapter is structured around the questions set out in the Policy Framework for Investment (PFI). Each section is preceded by the relevant PFI questions, which serves as general context for consideration of the main policy areas.