Towards the ASEAN economic community: foreign direct investment and investment liberalization in Indonesia
Date of Issue2014
S. Rajaratnam School of International Studies
The ASEAN Member Countries have committed to achieving "free flow of investment" among its member in 2015 . Hence a series of efforts have taken place in eliminating restrictions and impediments to promote a more open investment regime in the greater ASEAN areas. As one of the key ASEAN Member States and major recipient of Foreign Direct Investment (FDI), Indonesia can largely attribute its development path from the FDI inflows. While investment liberalization is necessary in conformant with the ASEAN Economic Community Blueprint, the policy setting in the prevailing laws related with deregulation of investment in Indonesia has been dominated with clause of safeguarding national interests. In addition, result of observations indicated that regardless of substantial progress made in liberalizing the country's FDI policy, certain significant barriers, particularly in restrictions of foreign entry, still remain. In the effort of evaluating country's performance and compliance with the AEC Strategic Schedule, the ASEAN scorecard was employed as a part of widespread compliance incentive among the Member States. Nonetheless, lack of description and information transparency hinder the positive effects of using the scorecard as the main tools of monitoring the integration process, including progressive investment liberalization in particular.