Testing the water<\/p>\n
President Megawati Soekarnoputri hosted a special breakfast
\nmeeting with American business leaders in New York on Monday, as
\npart of her itinerary during a visit to the U.S. to address the
\nUN General Assembly, to brief it on the latest developments in
\nIndonesia's overall situation.<\/p>\n
She informed the businesspeople of the progress Indonesia had
\nmade thus far in managing its economic crisis and in treading the
\npath of its transition to a decentralized, democratic government.
\nShe also told them frankly about a host of problems that had yet
\nto be resolved to render the overall atmosphere more conducive to
\ninvestment.<\/p>\n
On the same day, chief economics minister Dorodjatun Kuntjoro-
\nJakti met with Malaysian businesspeople in Kuala Lumpur, also to
\ndiscuss the prospects of investment in Indonesia now that the
\nmacroeconomic situation and political stability and security have
\nbeen strengthening.<\/p>\n
Earlier on Monday an Indonesian delegation, led by Minister of
\nFinance Boediono and Bank Indonesia Governor Burhanuddin
\nAbdullah, hosted a special session with around 30 international
\ninvestors in Dubai on the sidelines of the annual joint meetings
\nof the World Bank and International Monetary Fund (IMF).<\/p>\n
They briefed the investors on what measures the government had
\ntaken and would take to fuel a stronger economic recovery and on
\nthe government's plan to reenter the international financial
\nmarket next year with the issuance of bonds. Burhanuddin and a
\ngovernment team proceeded to New York and London with a similar
\nmission.<\/p>\n
These overseas missions should have been prompted by stronger
\nconfidence on the part of the government, brought about by the
\nsignificant progress made in the economic, political and security
\nfields over the past two years.<\/p>\n
Buoyed by improved macroeconomic and political stability, the
\ngovernment seemed to feel that now was the right time to embark
\non a campaign to inform the international market of the latest
\nsituation. It is now high time to test market sentiment, sounding
\nout investors' views on Indonesia.<\/p>\n
Termination of the IMF program later this year made it
\nessential for the government to assure the international market
\non its economic management after the end of the direct IMF
\noversight, and what would be the fate of the reform program.<\/p>\n
It was indeed quite opportune that the information campaign
\nand overseas business missions were made immediately after the
\nlaunching of the government White Paper on the reform agenda the
\ngovernment will implement next year, after the IMF program has
\nended.<\/p>\n
International creditors and investors, who had been worried
\nabout the post-IMF continuation of economic reform measures, had
\neagerly awaited the new reform agenda.<\/p>\n
Even though some critics have attacked the new reform
\nframework as being deficient in bold, innovative measures, it is
\nstill, at least on paper, quite credible as a new policy anchor
\non which international creditors and investors can base their
\nperception of Indonesia's economic outlook.<\/p>\n
Direct communication between Indonesia's policy- and decision-
\nmakers and international market players in general has become
\never more imperative now that Indonesia will have general
\nelections in 2004, with a new government to take over later next
\nyear.<\/p>\n
International creditors and investors not only want to know
\nabout developments likely until next year but are also greatly
\ninterested in a benchmark to assist them to make a reasonable
\ncalculation of the business and investment risks that would be
\ninherent in Indonesia under a new government.<\/p>\n
This was the function of the direct communications that
\ntranspired during the meetings in New York, Kuala Lumpur and
\nDubai, especially when the dialog was candid, as in the meeting
\nPresident Megawati had with American businesspeople.<\/p>\n
International creditors and investors are fully aware of the
\ncomplexity of the problems Indonesia has been encountering since
\n1998. They are rational enough not to expect immediate progress
\nin all sectors. What they wish to see is simply small, but
\nsteady, progress in the direction of reform.<\/p>\n
Direct communication through business meetings is one way of
\nassuring the international market (creditors and investors) of
\nwhat the future outlook of the Indonesian economy might be. Yet,
\nthe best indication remains the quality and pace of
\nimplementation of what is promised in the White Paper.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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