Indonesia's president pledges more steps to open economy

Indonesian President Joko Widodo speaks with Reuters during an interview at the presidential palace in Jakarta, Indonesia February 10, 2016. REUTERS/Darren Whiteside

SAN FRANCISCO (Reuters) - Indonesian President Joko Widodo on Wednesday pledged further steps to open Southeast Asia’s largest economy to foreign investment after announcing the most significant liberalization in a decade last week.

Widodo, speaking to an ASEAN trade conference in San Francisco, said that his plans to open up some 30 subsectors of the Indonesian economy to foreign investors for the first time and allow majority foreign stakes in 100 others did not go far enough.

“I’m not satisfied. Please understand that we are still only at the beginning,” Widodo said. “We will still continue to continue to simplify, continue to open up, continue to modernize our rules and regulations.”

Quoting a famous movie line from former California governor Arnold Schwarzenegger, Widodo added: “There are still many excessive permits, licenses and restrictions to which we will say, ‘Hasta la vista, baby.’

The so-called “big bang” lifting of investment restrictions announced last week would open the restaurant and the film industries and other sectors to full foreign ownership and allow 67 percent stakes in sectors including telecommunications and healthcare

Foreign business leaders have applauded Widodo’s moves to open up more investment opportunities in Indonesia’s vast domestic market of more than 250 million people, but some have questioned new restrictions in some sectors, including basic construction. Widodo spoke without taking any questions from the audience of largely American business executives.

The Indonesian president also said that he was pleased that Indonesia's fourth quarter 2015 economic growth rate of 5.04 percent beat expectations, that its rupiah currency IDR= has stayed relatively stable and that Jakarta's stock market did not suffer the steep declines that hit Chinese and U.S. shares.

“I am optimistic that we have reached a measure of economic stabilization. However, ladies and gentlemen, we still have a long way to go,” Widodo said. “We are not satisfied -- I’m not satisfied. Our investment climate is still not conducive enough.”

Reporting By David Lawder; Editing by Chizu Nomiyama