Aditya Suharmoko, The Jakarta Post, Jakarta
The political debate over the Bank Century bailout may harm Indonesia’s economy as the country loses momentum to bolster growth, while other nations gear up to attract investors, economists say.
“We need to be cautious in the first quarter of 2010 if political conditions continue to heat up. Investors may see that growth in other countries is higher, while this country is still busy focusing on politics when the elections finished six months ago,” Bank Mandiri economist Mirza Adityaswara said on Monday.
He was speaking on the sidelines of an economic outlook seminar held by the Indonesian Economic Graduates Institution (ISEI).
Mirza said Indonesia had lost its momentum to attract investment in the fourth quarter of this year.
Investors were taking a wait-and-see approach in the first nine months of this year due to the general and presidential elections, but they should have started investing in the last quarter of 2009, he said.
The political tension has made investors reluctant to spend money, he said. “It may trigger capital outflow if political conditions continue to intensify.