Why foreign investment hasn't returned here<\/p>\n
W. Scott Thompson, Gianyar, Bali<\/p>\n
Back in the late 1960s there was a sleazy American promoter
\nwho whispered in the ears of clients, \"do you wish to become
\nreally and truly rich?\" Many followed Bernard Cornfield briefly to
\nriches but not long after to rags.<\/p>\n
Yet the wish to become rich is at the heart of whether
\npeople -- and countries -- in fact become rich. Of course, in a
\ntrivial sense, everyone wishes to be rich, and every country says
\nit too. It's as true as saying everyone wishes to breathe air.
\nBut so what: Are you willing to do something to get rich?<\/p>\n
This is at the heart of the question posed in recent The
\nJakarta Post essays on Indonesia's development plan and its need
\nfor foreign investment. For there has never been any question
\nabout Indonesia's ability to get rich. It did a remarkable job on
\nthe first leg of the journey during the New Order -- but at great
\ncost.<\/p>\n
Now it has shown political sophistication in elections and
\nthe development of political parties, and still has vast mineral
\nresources and human talent in reserve. Yet disinvestments
\ncontinue and doubts rise.<\/p>\n
Recently I gave four lectures to business leaders in India, a
\ncountry that has shown overwhelmingly that it wishes to get out
\nof its poverty and on to the rapid growth charts that will
\nempower its billion people. In New Delhi I had the chance to talk
\nat length with a recently-retired civil service head of world
\ndistinction, about economic reform and business investment.<\/p>\n
My interlocutor, known to support reform, limited his
\nenthusiasm only by saying we ask merely that the investors have
\nan interest in India. Of course he said it with that famous
\nIndian civil service high tone that makes clear your `interest`
\nhad better be a bloody good one, a commitment to the ideals of
\nNehru, Gandhi, and so forth.<\/p>\n
The truth is, the great civil servant in Delhi had hardly
\nasked for much. But if you want to get rich, you can't even ask
\nthat, or so the evidence suggests. Foreign investment -- and thus
\nthe opportunity for job creation at a high technology levels --
\ncomes where investors feel confident.<\/p>\n
They feel they are bringing everything to bear that they have
\nlearned, and which has made their home country rich, to the
\nrecipients. If they don't exactly seek free goods, they expect
\nsomething serious for the heightened risk they take in investing
\nin a politically inexperienced country.<\/p>\n
Most of all, they can sense whether the country wants, really
\nand truly wishes, to get rich. Because if the country doesn't,
\nhow will they. The investors, themselves get richer?<\/p>\n
Go to China and look at the cranes dominating the landscape.
\nAny doubt that China intends to get rich, and to have the goods
\nthat goes with it -- educational opportunities, higher medical
\nstandards, cars and color tvs -- dries up on the first view of
\nany of the growth cities. Investors come in because despite the
\ncommunist party's presence and plenty of corruption, they can
\nsense, even smell, the desire to join them in getting rich.<\/p>\n
Thailand got richer faster, between 1985 and 1995, than any
\ncountry in history. This was because the government let the
\nentrepreneurs run their own show, and let investors rush in on
\ntop of each other, building infrastructure along with hospitals,
\nfreeways and automobiles.<\/p>\n
Foreigners were made to feel welcome. You now get from
\nairplane to taxi in minutes -- immigration is almost a fast-
\nwalking line. No triple lines for paying new visitors' taxes,
\nhour open hour, and it's easy in Thailand to stay a long time. No
\ngreased palms at the customs desk.<\/p>\n
True, the Thai made many mistakes, especially at the
\necological-environmental level. But they are now rich enough to
\nundo the damage. To those who say they have abandoned their
\ndignity they can reply, \"what about the dignity of the starved
\nchild or the uneducated teenagers? Aren't they part of the
\nnation's dignity? And now that we are rich we have higher
\nprestige all over the world.\"<\/p>\n
In India the problems are vastly larger, and the recent
\nelections spell out that the poor two thirds aren't going to let
\nthe vast -- but one third -- middle class keep all the winnings.
\nYet you can read it in the papers and smell it in the air.<\/p>\n
Investment is going to pour into India and it is going to
\nsustain 6-9% growth rates for the indefinite future. The demands
\nof the two thirds who returned the Congress to power, is also
\ngood economic news; if they do not benefit even in the medium
\nterm, then economic growth will ultimately be curtailed, for lack
\nof a broader local market.<\/p>\n
It is true that investment is slow to gather speed and slow to
\nchange habits. The image of past instability dies hard with
\nbusinessmen who only skim the headlines. But there must be a
\nfurther reason why disinvestments has been so substantial here
\nsince 1998, even now as the political achievements are
\nspectacular and economic growth respectable.<\/p>\n
The clue is in how Indonesia, the great and sprawling
\narchipelago, presents itself. The investor arrives. He knows
\nthere's been bombs and terrorism, and he is impressed by the
\nworld-class police work that has brought the culprits to heel.<\/p>\n
But what kind of country, just when its tourist receipts are
\nhalved or worse, travel advisories and further bomb threats,
\nmakes its visitors line up in new line upon new line to pay a $25
\ntax to enter -- and then cuts his allowable visit from 60 to 30
\ndays? That is what he is asking.<\/p>\n
Those acts in themselves may not be so important. But what
\nthey symbolize is significant. What counter-productive,
\nnationally self-destructive, acts will Jakarta undertake next?
\nVisitors who want to stay longer now spend their extra dollars in
\nSingapore to renew their visa -- or go to and stay Malaysia,
\nwhich asks no questions and lets you in for 90 days. There are a
\nthousand other similar little problems like this -- but let these
\nsymbolic ones stand out and symbolize what, to the investing
\nbuli, is wrong amid so much right.<\/p>\n
A hospital is not there to spread disease, Florence
\nNightingale so famously stated. Immigration policy, supposedly
\nset to encourage the major industry of tourism, shouldn't shoot
\nitself in the foot. But that is what has happened.<\/p>\n
It's all about signals. Signals create the atmosphere. A City
\nof London merchant banker passes on only a few words to his
\nFrankfort counterpart, of his impressions from his trip to Asia,
\nas they pass through airports in Istanbul or Rome. \"Wow -- the
\nThai, they really make it easy for us. What a show they put on at
\nthe airport! Better than home!\"<\/p>\n
An Indonesian who wants his country to become really and truly
\nrich should ponder carefully what the Englishman will say of his
\nvisit to Indonesia, where there is so much more to see, so many
\nmore resources -- yet so little tangible interest in letting the
\ninvestor -- not to mention the poor tourist -- get on with it.
\nAnd all those little impediments when s\/he arrives. If you want
\nto get rich, welcome those who can help you get there with open
\narms -- not interminable airport lines.<\/p>\n
Dr. W. Scott Thompson, D. Phil. is Adjunct Professor of
\nInternational Politics, Fletcher School of Law and Diplomacy,
\nTufts University, Medford, MA. The views expressed are personal.<\/p>",
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