'Marriott blast has limited impact'<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The economic impact of the recent blast at the Marriott Hotel was
\nexpected to be limited to a few sectors, allowing the economy to
\nremain on track to achieving the growth target of around 4
\npercent this year, analysts claimed.<\/p>\n
The quick recovery of the rupiah and the stock market, both of
\nwhich took a hit on the day of the bombing, leaves only the
\ntourism and travel sectors to suffer a longer term impact,
\naccording to Citibank economist Anton Gunawan.<\/p>\n
\"Assuming that no similar bombs go off in the future, the
\nMarriott blast should not cause a devastating economic impact
\noverall, although tourism will suffer in the next couple of
\nmonths,\" Anton told The Jakarta Post on Sunday.<\/p>\n
Not that investor confidence, especially foreign, was not
\nshaken because of the event, Anton added, but it would be
\nunlikely to cause a mass exodus.<\/p>\n
\"The confidence of the existing foreign investors was indeed
\naffected, but it would only make them cautious, but not to a
\ndegree that can create a capital exodus,\" he said, adding that
\neven the more severe bombings in Bali, which caused the death of
\n200 people, last year did not cause much capital outflow.<\/p>\n
He welcomed the planned stimulus package from the government
\nto help mitigate the bombing's impact, referring to the
\ngovernment's plans to introduce a set of policies designed to
\nimprove business and investment climate at home.<\/p>\n
The package will be officially announced next week when
\nPresident Megawati Soekarnoputri unveils the 2004 national
\nbudget.<\/p>\n
Last week's bombing attack rocked the prestigious five-star
\nhotel in one of Jakarta's busiest business districts and has so
\nfar left 11 people dead and some 150 others injured. The rupiah
\nand stock market stumbled on that day on fears of massive capital
\ninflows resulting from the shattered confidence.<\/p>\n
But, things changed for the better in the following days, with
\nthe local unit and the stock index starting to recover. By
\nFriday, the rupiah extended its rally for three straight days to
\nclose at Rp 8,590 per dollar.<\/p>\n
Likewise, the stock index ended at 505.36 points, also above
\nthe pre-blast closing of 503.94.<\/p>\n
Those provide signs that the economic impact would be isolated
\nand short-lived, with tourism to be the hardest hit.<\/p>\n
\"The direct longer term impact would be on tourism, which has
\njust begun to bounce back from the Bali bombings. We won't see
\nthat recovery in the next several months,\" Sri Adiningsih,
\neconomist with the Gadjah Mada University, told the Post.<\/p>\n
When the bombing took place, the hotel was averaging a 77
\npercent occupancy rate, way above the country's average of 45 to
\n50 percent, according to tourism-related associations.<\/p>\n
Sri said that although she forecasted the economy to grow
\nslightly below 4 percent this year, it was not because of the
\nterror attack, but more due to the government's slow progress in
\nboosting investment and exports.<\/p>\n
Despite the limited impact, Sri and Anton cautioned the
\ngovernment against sitting back, because the investment community
\nwas now waiting for real action to restore security and stability
\nand deter similar attacks in the future.<\/p>\n
Meanwhile, Malaysian textile merchant Ng Chiaw Iang told AFP
\nthat the attack had raised the risk perception among foreign
\ninvestors, and that a swift response from the government to
\nresolve the matter would be the key to restoring that confidence.<\/p>\n
\"I still have confidence in doing business in Indonesia, but
\nif there are new attacks, I may have to reconsider my business
\nplans,\" he said.<\/p>\n
Local businessman Anton Supit, while noting that the economic
\nimpact would be limited, said that the government still had to
\nimprove the investment climate, as even before the bombing, new
\nforeign investors remained reluctant to invest because of a less
\nthan attractive business environment.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/marriott-blast-has-limited-impact-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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