Indonesian president Jokowi bans foreign acquisitions in several tech sectors?

Indonesian president Joko “Jokowi” Widodo.

Indonesia’s president Joko Widodo (aka Jokowi) asked the nation’s head of creative economy Triawan Munaf to protect local online businesses from overseas acquisitions, reports CNN Indonesia. The mandate was announced as part of the president’s effort to maintain the growth of local online companies to better benefit Indonesia. The move came suddenly, as Jokowi only appointed Munaf to the position on Monday also.

The action could be seen as a contradiction of Jokowi’s previous campaign promises to make Indonesia a friendlier place for foreign investment.

“The president saw a lot of sub-sector SMEs that were not considered. He always gave the example of online businesses as those that should be maintained, protected, and enlarged in Indonesia alone, and not rushed to be sold to foreigners,” Munaf told CNN Indonesia. “The president requested that online business developers not sell out, but instead become world-class players in their own right.” Triawan said he agrees with the president, who wants the archipelago’s online businesses to also increase state revenues.

At least 15 types of business now fall under the mandate of Indonesia’s Ministry of Creative Economy including advertising, design, fashion, video, film and photography, interactive games, music, performing arts, publishing, computer services and software, TV and radio, and more.

Not long before Jokowi’s announcement, local classifieds ecommerce site Berniaga officially announced the closure of its merger with OLX on Monday. South Africa-based Naspers, as a shareholder of OLX, became the majority shareholder in the joint venture by acquiring 64 percent, while 701Search (a joint venture between Singapore Press Holdings and Norway-based Schibsted Media Group and Telenor Group) held onto 36 percent.

Munaf says he wants to focus the creative economy’s efforts on new business innovations that harness the creativity, skills, and talents of Indonesians to create wealth and jobs from the online space. Indonesia’s Negative Investments List combined with Jokowi’s new mandate officially limit or bar foreign investments and acquisitions in 22 sectors of the Indonesian economy.

See: 10 things you need to consider before investing in Indonesia

Source: CNN Indonesia

Update 1/28/15: Head of Indonesia’s creative economy Triawan Munaf reached out to Tech in Asia to clarify that president Jokowi is not prohibiting foreign acquisitions of the nation’s online businesses, but that the media prior to Tech in Asia’s translation had taken the story out of context. Munaf clarified that Mr. Jokowi’s actual message was that local online businesses should maximize their potential before allowing foreign acquisitions so that they can be bought for higher prices. The government wants to support the local online business ecosystem as it currently is, and is in talks with several practitioners.

Editing by Paul Bischoff; lead image from Global Panorama.