$16b expected to return from S'pore: Report

$16b expected to return from S'pore: Report

SINGAPORE (AFP): A fifth of US$80 billion in funds that fled Indonesia when unrest was at its height is expected to return following the election of a new leadership, the Singapore Business Times said Tuesday.

New President Abdurrahman Wahid was given the estimate by a number of Indonesian tycoons who had fled the country during turmoil of the past two years, it reported.

Quoting an unidentified member of the president's inner circle, the paper said Wahid had received a commitment from the mostly ethnic-Chinese tycoons that Indonesian funds parked in Singapore and other countries would return.

Wahid, known popularly as Gus Dur, had agreed to the businessmen's request for security guarantees in exchange, the Business Times said.

Some of the tycoons named are Liem Sioe Liong, also known as Sudono Salim, the patriarch of the Salim group, and Eka Cipta Wijaya, head of the Sinar Mas group.

"Gus Dur has got a commitment that $16 billion worth of funds now parked in Singapore and elsewhere will return to Indonesia," the source was quoted as saying.

The source is said to be well informed about Wahid's expected visit to Singapore this Saturday during which the issue of the return of Indonesian capital is expected to feature prominently.

According to the report, the expected return of the funds was being coordinated by a group of Indonesian businessmen in Singapore.

The Indonesian central bank has estimated that $80 billion flowed out of Indonesia after the Asian financial turmoil erupted in mid-1997 and long-ruling president Suharto was deposed amid violent unrest in May 1998.

During his Singapore visit to kick off a whistle-stop Southeast Asian tour, Wahid is expected to meet members of the Indonesian as well as international business community.

The Business Times said Indonesia's new foreign minister, Alwi Shihab, had told the newspaper before he was formally appointed to the post that Indonesia hoped for Singapore's understanding on the return of Indonesian capital.

"We would like the Singapore government to encourage business people who are related to Indonesia, to come back. Most of them have offices in Singapore. The encouragement of the Singapore government will be highly appreciated," Alwi was quoted saying.

Salim has kept up a presence in Singapore, Hong Kong and other cities while building a huge business empire in Indonesia through his connections during the Suharto era.