Economy bombed out<\/p>\n
The bomb terror in Bali will certainly have a devastating
\neffect on the local economy, which depends largely on tourism,
\nand will cause even wider disruption to the fragile Indonesian
\neconomy.<\/p>\n
The bomb attack would abort the process of economic recovery
\nwhich had just started on the back of the strengthening
\nmacroeconomic and political stability, destroying whatever little
\nconfidence the market still had in the economy, currently in the
\nfifth consecutive year of its crisis.<\/p>\n
The immediate impact certainly would fall on Bali, hitherto
\ndubbed the island of gods, which had previously been spared from
\nthe spate of ethnic and religious violence and bomb attacks
\nraging in various parts of the country since 1998.<\/p>\n
Almost 1.4 million foreign tourists entered Bali directly
\nthrough Denpasar's international airport last year and quite a
\nportion of the 3.7 million other foreign tourists who flew in
\nthrough other Indonesian gateways also proceeded to the island.<\/p>\n
Obviously, the bomb terror would force many tourists to cancel
\ntrips to Bali. In fact quite a number of those already staying in
\nBali have decided to cut short their visits, inflicting
\ndevastating impact on the business of hotels, airlines,
\nrestaurants and handicraft shops.<\/p>\n
Numerous suppliers to hotels and other tourism-related
\nbusinesses such as transportation and food producers would suffer
\nas well. Further down the line, worker layoffs would follow and
\nthe cash-strapped local administration would have to retrench on
\nspending due to anticipated smaller tax receipts.<\/p>\n
Certainly the damage would not be limited to Bali. The
\nnewspaper headlines around the world about the horror, the
\nsplashing display of pictures of burnt bodies would build up an
\ninternational perception of Indonesia being an unsafe place to
\nvisit, a target and bastion of terrorists.<\/p>\n
And given the large number of fatalities, most of them were
\nforeign travelers, it would take more than one year for the
\ncountry's tourism industry to recover from the trauma.<\/p>\n
That is quite saddening indeed because Indonesia is supposed
\nto be a paradise for foreign tourists now that its currency
\n(rupiah) is still more than 70 percent cheaper against the dollar
\ncompared to mid-1997 before the economic crisis struck the
\ncountry.<\/p>\n
Moreover, tourism, besides being labor intensive and resource-
\nbased, is an industry with multiplier virtuous impact on other
\nactivities that the crisis-ridden economy badly needs to help
\nsustain its recovery process.<\/p>\n
Further down the line, the tourism crunch would further worsen
\nthe service accounts of the balance of payments. The deficit of
\nthe service accounts would likely be much higher than the US$16.8
\nbillion estimated for this year and $17 billion projected for
\n2003.<\/p>\n
This in turn would threaten the current account of the
\nexternal balance. Imports might have to decrease to prevent a
\nwidening current account deficit, but a curb on imports would
\nkill the export-oriented manufacturing industry that depends
\nmainly on imported inputs, parts and components.<\/p>\n
Yet still more worrisome is the damage the international
\nperception of Indonesia being a target of terrorists would
\ninflict on foreign investor sentiment in the country.<\/p>\n
Many foreign portfolio investors, who had of late fueled a
\nmild recovery on the Jakarta stock market, would, at least for
\nthe time being, delete Indonesia from their computer screens.
\nThis would also adversely affect asset sales by the Indonesian
\nBank Restructuring Agency and privatization programs that are
\nbadly needed for fiscal sustainability and corporate
\nrestructuring.<\/p>\n
Had it not been for the bomb terror, the strengthening
\nmacroeconomic and political stability since early this year would
\nhave been a momentum for the economy to gain a stronger recovery,
\nbuilding stronger foundations to weather the anticipated
\npolitical turbulence in the run up to the general elections in
\n2004.<\/p>\n
But the momentum seemed to have been destroyed now.<\/p>\n
However, the damage could still be contained and the healing
\n(confidence-rebuilding) process could be speeded up if the
\ngovernment, including the legislative and judicial branches,
\nbecome more united now to save the economy from plunging into an
\nabyss.<\/p>\n
It is precisely in this time of crisis that the three branches
\nof the government need to strengthen cooperation and demonstrate
\nstronger resoluteness in pushing ahead with the reform measures
\nto improve political stability, security and law enforcement and
\nbuild market confidence in the economy.<\/p>\n
It is completely futile and even self-damaging for officials
\nor politicians to resort to blaming foreign parties for our
\nproblems, let alone bashing the International Monetary Fund (IMF)
\nand other foreign creditors.<\/p>\n
The credibility of the government is now so low that the whole
\ncountry, the entire nation, urgently needs international
\nunderstanding and cooperation to get us out of the current multi-
\ndimensional crisis.<\/p>\n
;JP;SBS;
\nANPAk..r..
\nEditorial-Megawati-Travel
\nStay home, Mrs. President
\nJP\/6\/6EDIT-16<\/p>\n
Stay home, Mrs. President<\/p>\n
President Megawati Soekarnoputri is planning more elaborate
\ntrips abroad, including one to Mexico to attend the APEC summit
\nlater this month and another to attend the Association of
\nSoutheast Asian Nations (ASEAN) summit in Cambodia on Nov. 2 to
\nNov. 5. Given the critical domestic situation after the tragic
\nBali bombing, however, we strongly suggest that she remain in
\nIndonesia.<\/p>\n
With the possible exception of the ASEAN summit in Phnom Penh
\nin early November, there are a number of problems here at home
\nthat more urgently require her attention, such as following up on
\nthe decision to introduce tighter coordination of the
\nintelligence services. As we have noted, the Bali disaster is one
\nindication of failure within the state's intelligence network.
\nThe President's presence in Jakarta is required to continuously
\nprod the various government agencies assigned to finding the
\nperpetrators of the Bali bombing and bring them to justice.<\/p>\n
With graft allegations being leveled at the attorney general,
\nthe question of appointing a new attorney general naturally
\nbecomes more pressing. After all, how can the issue of terrorism
\nbe intensely pursued if the Attorney General's Office is burdened
\nwith damaging allegations?<\/p>\n
However, the most pressing task that requires the presence of
\nPresident Megawati is the rehabilitation of Bali in the wake of
\nthe Oct. 12 tragedy. Certainly the devastated area needs to be
\nreconstructed as soon as possible and bank loans with easy terms
\nshould be provided to the shopkeepers whose business premises are
\nnow in ruins. But most important of all, the cohesion of the
\nfractured Balinese community needs to be restored since the
\ntraumatic experience of last Saturday night has caused friction
\nand created an atmosphere of suspicion that must not be allowed
\nto fester.<\/p>\n
We are certain that several visits to Bali by the President in
\nthe wake of the Oct. 12 tragedy are required. This rehabilitation
\nprocess will be of significant help in convincing the world that
\nthe healing capacity of the Indonesian political scene is still
\nintact. We therefore believe that the presence of the President
\nat home is urgently required.<\/p>",
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"sponsor": "Okusi Associates",
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