Govt Plans Allowing Island Management by Foreign Investors

TEMPO.CO, Jakarta - The government plans to allow foreign investors to manage Indonesian islands in a bid to attract tourists. Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan said the islands managed by foreign investments will be designed as tourism areas.

"All done using business mechanism; there will be no transfer of ownership," he said in Jakarta Wednesday, January 11. 

Luhut pointed to Morotai in Halmahera Islands, Maluku, where there are seven airports where Japanese investors wish to expand and run one of those airports and turn it into an elderly resort. "They can give it any name they want, as long as they report to us," he said. 

Luhut said he Japan will be given a priority to manage the island, ensuring that the management will adhere to Indonesian laws.

"We'll see, the president plans to make an offer," he said.

Luhut is optimistic there is huge potential to attract foreign tourists, especially since there are more than 4,000 islands in Indonesia that are left unmanaged and without names. The government plans to allow foreign investors to develop those islands, he said, but stressed that the islands are not for sale and "will still belong to Indonesia."

According to Agrarian and Spatial Planning Minister Sofyan Djalil, the important thing in managing an island is planning and regulation. "If the island is for tourists—it's fine, as long as there are plans and regulations," he said yesterday. 

Sofyan asserted that only an Indonesian national is allowed to own lands in Indonesia. Foreigners can only use a land by getting a land-use permit (HGB). but they cannot be the landowners.  

Sofyan said it is better to let foreign investors develop an empty island so it can bring benefits to the state, "as long as the management is proper and the activities don’t interfere with the state's security," he said.

Tamba Hutapea, deputy for investment planning at the Investment Coordinating Board (BKPM), said it's fine to let foreign investor develop tourism or farming in an island, as those sectors are open for investments.

"Island management has no relation with the negative investment list (DNI). The DNI only regulates business fields," he said yesterday.

ANGELINA ANJAR SAWITRI | RICHARD ANDIKA | DIKO OKTARA