Indonesia backtracks on allowing alcoholic drinks investments for foreign firms

JAKARTA: Indonesia's President Joko Widodo on Tuesday reinstated a ban on new foreign investment in the manufacturing of alcoholic drinks, just a few weeks after agreeing to relax restrictions as part of a broader effort to attract investors.

The world's biggest predominantly Muslim country banned new foreign investment in alcoholic beverages in the 1990s, but the president issued a regulation last month that would have permitted it in provinces where Muslims are not the majority of the local population.

However, the regulations were still met with criticism from Islamic groups.

"After hearing input from ulemas ... I hereby declare that the presidential regulation pertaining to opening new investments in the industry of alcoholic beverages revoked," Jokowi, as the president is popularly known, said in remarks broadcast on television.

Indonesia allows sales of alcohol in bars and supermarkets in most parts of the country, with beer and wine accounting for the majority of the local revenue.

Aside from alcohol, the president did not refer to other parts of the regulation, which relaxes restrictions on foreign ownership.

The regulation replaced a so-called "negative investment list", covering businesses restricted for foreign investors, with a new "priority list" offering incentives.

Sectors like land transportation, ship vessel traffic information systems and flight navigation are among those opened to foreign firms under the regulation.