http://thejakartaglobe.com/home/alcohol-why-indonesia-isnt-producing-enough-and-how-to-fix-that/316628
July 07, 2009 Dian Ariffahmi Bottles of alcoholic beverages at the West Jakarta mayor's office last month. Tens of thousands of the bottles were seized in raids between April and May this year, then destroyed. (Photo: Safir Makki, JG) Alcohol: Why Indonesia Isn't Producing Enough (And How to Fix That) Indonesia tops a lot of global lists: It is the world's largest archipelago; it has the world's largest Muslim population; and, unknown to many, it is also one of the largest importers of alcoholic beverages. That might explain why a senior member of the Indonesian Chamber of Commerce and Industry (Kadin) urged the central government on Monday to allow foreign investment into the country's alcohol production sector, saying that keeping it on the "negative investment" list only increased the country's dependence on imported alcohol. The government is currently preparing a presidential decree on a newly revised negative investment list, which it is expected to share with industry groups on Saturday for comment. Maxi Gunawan, head of Kadin's committee for Europe, said Indonesia was already the sixth largest importer of alcohol in the world by volume, just behind Thailand. "Now we are importing 100 million bottles a year. It's much more efficient if we can produce them here," he said. The inclusion of alcohol on the negative investment list is more political than economic, Maxi said, and opening up the industry will mean less import taxes to distributors and bring additional benefits, such as new jobs. Beer manufacturers PT Multi Bintang Indonesia and PT Delta Djakarta, which produces Anker beer, are the sole alcohol producers on the stock exchange and cannot meet domestic demand. But Muhammad Lutfi, chairman of the Indonesian Investment Coordinating Board, said it would be hard to open up the industry because it had been on a government "black list" of products and services deemed detrimental to society, such as gambling, since 1994. "It's still closed [to investment], and there is no way that it will be opened," Lutfi said, noting that it could spark protests from the country's Muslims. "Even if we exclude that industry from the list, I think alcoholic beverages would not grow as fast as other industries," Lutfi said, adding that local producers were not even presently operating at maximum capacity. [Non-text portions of this message have been removed]
