`Court abuses hamper investment'<\/p>\n
Mark Drajem, Bloomberg, Washington<\/p>\n
The Indonesian government needs to rein in the abuses of its
\ncourts, army and police if the Southeast Asian nation is going to
\nattract foreign investment, a U.S. State Department official
\nsaid.<\/p>\n
Matt Daley, the department's top official for East Asia, urged
\nthe government to improve both security and justice to counter
\nthe economic fallout from last month's terrorist bombing in Bali.
\nThe U.S. estimates the bombing will shave as much as 1.5
\npercentage points off of the country's growth rate this year.<\/p>\n
\"Indonesia is still a dangerous place for Americans and others
\nand will likely remain so for some time,\" Daley told a meeting of
\nthe United States-Indonesia Society. Still, after the attack,
\n\"the government has more room to maneuver than it may have
\nrealized.\"<\/p>\n
Because of the continuing threat, the State Department has no
\nplans to remove a warning that Americans avoid Indonesia because
\nof the threat of additional attacks.<\/p>\n
Daley's warning underlines U.S. concern about the world's
\nmost-populous Muslim nation. Many analysts blame Indonesia for
\nfailing to take terrorist threats seriously before the Bali
\nbombing, which killed more than 190 people and injured 300.<\/p>\n
Most of those people injured in the Bali attack were
\nAustralians and Balinese workers. Indonesia has conducted a \"very
\nthorough\" investigation of the attack and of the links of the
\ngroup alleged to be responsible -- Jamaah Islamiyah -- to the al-
\nQaeda organization, according to the State Department.<\/p>\n
The U.S. is also pressing Indonesian President Megawati
\nSoekarnoputri to do more to curb human rights abuses by the
\nmilitary and to make sure the courts are functioning as they
\nshould.<\/p>\n
The Indonesian courts are a \"non-transparent legal maze,\"
\nDaley said. Investors want \"the government to demonstrate it
\nunderstands the gravity of the problem.\"<\/p>\n
Clear and orderly courts are essential to attract investors,
\naccording to the World Bank. And the government has made
\nattracting investment one of its top priorities. Indonesia needs
\nto accelerate state-asset sales in order to cover a widening
\nbudget deficit.<\/p>\n
Just two weeks after the Bali attacks it hosted potential
\ninvestors at a Bali resort in an effort to lure them to bid on
\nsome of the $3.9 billion worth of asset sales planned this year.<\/p>\n
If the Indonesian courts worked better, then human rights
\ngroups might not try to use American courts to try to link U.S.
\ncompanies to abuses by the Indonesian military or police, he
\nsaid.<\/p>\n
In July the State Department urged a federal judge to dismiss
\na lawsuit against Exxon Mobil Corp. over its operations in
\nIndonesia, saying the suit may harm the U.S.-led war on terrorism
\nand U.S. regional interests.<\/p>\n
The suit, on behalf of 11 Indonesian villagers, claims that
\ncompany-paid security forces committed murder, torture and rape
\nin Aceh province where the company operates a government-owned
\noil field. The company has denied the allegations.<\/p>\n
\"We continue to work for legal reform in Indonesia,\" Daley
\nsaid. \"We are pushing for accountability for human rights abuses
\nby the (army) and others.\"<\/p>",
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