Businessmen call for restoration of order, security<\/p>\n
JAKARTA (JP): The Indonesian business community urged
\nPresident B.J. Habibie on Tuesday to immediately restore order
\nand security in the country as a prerequisite for businesses to
\nresume normal operations.<\/p>\n
Chairman of the Indonesian Chamber of Commerce and Industry
\n(Kadin) Aburizal Bakrie said the government had to stamp out the
\nrising incidence of rioting and looting which had been
\nendangering businesses.<\/p>\n
\"A feeling of safety is very essential for businesses to
\nresume normal operations,\" he told reporters after meeting
\nHabibie.<\/p>\n
The chamber's appeal came after almost one week of rioting on
\nthe island of Ambon that left more than 50 people dead and
\nhundreds of buildings and cars damaged with material losses
\nestimated at around Rp 500 billion.<\/p>\n
\"I am glad to tell you that the President has pledged the
\ngovernment will act firmly in dealing with any rioting and
\nlooting,\" he added.<\/p>\n
The country has been overrun by a seemingly endless series of
\noutbreaks of unrest and violence since the fall of the former
\ndictator Soeharto last May. Analysts believe that most of these
\nhave been instigated by various vested political interests as the
\nJune general election approaches.<\/p>\n
The wave of social unrest is now becoming an increasingly
\nserious threat to businesses as trucks hauling goods have often
\nbeen looted, warehouses and properties burned, and customers
\nfrightened away.<\/p>\n
Export-oriented manufacturing companies have complained that
\nmany of their customers overseas have diverted orders to other
\ncountries for fear that deliveries from this country would not be
\nable to meet the set schedules.<\/p>\n
Many enterprises have folded and those still in operation are
\ntaking the brunt of punitively high interest rates, and facing
\nbankruptcy litigation from impatient foreign creditors. The
\nmoribund banking industry not only has virtually stopped new
\nlendings but is calling in loans.<\/p>\n
The riots have further eroded whatever little confidence there
\nis still in the government and the country's economic prospects
\nand are undermining the painful economic reform programs badly
\nneeded to stabilize the economy.<\/p>\n
Minister of Investment Hamzah Haz admitted on Tuesday that the
\nunrest had caused great concern among foreign investors.<\/p>\n
\"If the social, political and security conditions deteriorate
\nthis year, foreign investment will further decline,\" he told
\nreporters following a separate meeting with Habibie.<\/p>\n
He was apprehensive that the US$5 billion in foreign
\ninvestments approved last year might not be realized this year.<\/p>\n
\"I think foreign investors will wait on the sidelines until
\nafter the completion of the general election,\" he added.<\/p>\n
Aburizal also called on the government to make strong efforts
\nto reinvigorate the real sector of the economy.<\/p>\n
He said the government had so far focused on macro economic
\npolicies and banking reform at the expense of the real sector.<\/p>\n
Citing an example, he pointed to the well-publicized
\ngovernment plan to create an export financing agency to help
\nexporters secure financing for the importing of raw materials
\nthat had never materialized.<\/p>\n
The government has said that the export financing agency will
\nstart up operations only after the completion of the bank
\nrecapitalization program in March.<\/p>\n
Aburizal, however, doubted whether the recapitalization
\nprogram could be completed as scheduled, given the stiff
\nopposition of the House of Representatives to the proposed budget
\nallocation for the program.<\/p>\n
The business leader expressed concern that it might take
\nanother one and a half years to settle the non-performing loans
\nof the domestic commercial banks. (rei\/prb)<\/p>",
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