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Proper property rights for foreigners?

Grundström, Malin LU and Himmelman, Fredrik (2011) NEKK01 20102
Department of Economics
Abstract
The development of tourism is important for Indonesia and has potential to increase economic growth. Lack of capital is a constraint that affects the growth potential negatively. However, capital gaps can be filled with foreign direct investments. Lombok is the closest neighbor to tourism flourishing Bali and has a big potential to expand its tourism industry. An international airport is planned to open in 2012, infrastructure is being improved and the island is generally considered to be, in terms of tourism, “the next Bali”. The thesis aims to explore the policies, regulations and procedures around foreign investments of property in Lombok. Furthermore, the thesis aims to analyze these policies, regulations and procedures and how they... (More)
The development of tourism is important for Indonesia and has potential to increase economic growth. Lack of capital is a constraint that affects the growth potential negatively. However, capital gaps can be filled with foreign direct investments. Lombok is the closest neighbor to tourism flourishing Bali and has a big potential to expand its tourism industry. An international airport is planned to open in 2012, infrastructure is being improved and the island is generally considered to be, in terms of tourism, “the next Bali”. The thesis aims to explore the policies, regulations and procedures around foreign investments of property in Lombok. Furthermore, the thesis aims to analyze these policies, regulations and procedures and how they are likely to affect incitements for foreigners to make the investments.

The questions at issue are: What are the policies and regulations in Lombok concerning foreigners that are purchasing property? What are the procedures for foreigners that are purchasing property in Lombok? According to institutional theory and the World Bank’s indicators that are affecting the possibilities to do business; what are the effects of the policies, regulations and procedures on the incitements for foreign investors to purchase property in Lombok? The questions are answered by a descriptive and explanatory case study. Economic growth- and institutional theories are used to describe the policies, regulations and procedures, and their effects on the incitements to invest. Empirical material is collected from the Internet and from semi-structured interviews with lawyers, governmental officials, property agencies and foreign property investors.

The results from the analysis point at issues that affect the incitements for property investments negatively for foreign investors. The largest issue is the insecurity and risk of not being able to own property as a foreigner. The second largest concern is not being able to find satisfying information about the laws and procedures concerning the purchasing process, and that the procedures are complicated and many. Also, the results indicate that time and cost demanded for completing the different procedures are factors that can affect the incitements to invest negatively, and that the time aspect affects the incitements more than the cost. (Less)
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author
Grundström, Malin LU and Himmelman, Fredrik
supervisor
organization
alternative title
A case study of the institutions for foreign property investments in Lombok, Indonesia
course
NEKK01 20102
year
type
M2 - Bachelor Degree
subject
keywords
Lombok, Indonesia, economic growth, FDI, foreign direct investment, tourism, institution, property right
language
English
id
1766120
date added to LUP
2011-02-16 14:21:01
date last changed
2011-02-16 14:21:01
@misc{1766120,
  abstract     = {The development of tourism is important for Indonesia and has potential to increase economic growth. Lack of capital is a constraint that affects the growth potential negatively. However, capital gaps can be filled with foreign direct investments. Lombok is the closest neighbor to tourism flourishing Bali and has a big potential to expand its tourism industry. An international airport is planned to open in 2012, infrastructure is being improved and the island is generally considered to be, in terms of tourism, “the next Bali”. The thesis aims to explore the policies, regulations and procedures around foreign investments of property in Lombok. Furthermore, the thesis aims to analyze these policies, regulations and procedures and how they are likely to affect incitements for foreigners to make the investments.

The questions at issue are: What are the policies and regulations in Lombok concerning foreigners that are purchasing property? What are the procedures for foreigners that are purchasing property in Lombok? According to institutional theory and the World Bank’s indicators that are affecting the possibilities to do business; what are the effects of the policies, regulations and procedures on the incitements for foreign investors to purchase property in Lombok? The questions are answered by a descriptive and explanatory case study. Economic growth- and institutional theories are used to describe the policies, regulations and procedures, and their effects on the incitements to invest. Empirical material is collected from the Internet and from semi-structured interviews with lawyers, governmental officials, property agencies and foreign property investors.

The results from the analysis point at issues that affect the incitements for property investments negatively for foreign investors. The largest issue is the insecurity and risk of not being able to own property as a foreigner. The second largest concern is not being able to find satisfying information about the laws and procedures concerning the purchasing process, and that the procedures are complicated and many. Also, the results indicate that time and cost demanded for completing the different procedures are factors that can affect the incitements to invest negatively, and that the time aspect affects the incitements more than the cost.},
  author       = {Grundström, Malin and Himmelman, Fredrik},
  keyword      = {Lombok,Indonesia,economic growth,FDI,foreign direct investment,tourism,institution,property right},
  language     = {eng},
  note         = {Student Paper},
  title        = {Proper property rights for foreigners?},
  year         = {2011},
}