25% of funds deposited overseas has returned

25% of funds deposited overseas has returned

JAKARTA (JP): Indonesian Business Development Council chairman
Sofyan Wanandi estimated on Tuesday a quarter of the funds
deposited overseas by local businesspeople had returned to the
country and been reinvested.

Speaking during a break in a seminar on Indonesia's economic
recovery in 2000, Sofyan predicted all the funds taken out of the
country during the economic crisis would return to Indonesia in
one to two years.

"At least 20 percent to 25 percent of the money which flowed
out of the country has returned, and I believe in the next one or
two years all the money will come back," he said.

He estimated that total domestic funds deposited overseas
reached around US$15 billion -- far below some estimates which
put the figure at $80 billion. And of that $15 billion, Sofyan
guessed $3 billion had been returned to Indonesia.

Those returning their money, he said, were medium-sized
businesspeople who used the funds to finance the expansion of
their businesses, particularly in the retail sector.

Sofyan noted the retail sector had been bullish recently
despite a lack of banking credits to support its growth.

"The development of this (retail) sector indicates capital
inflow," he was quoted by Antara news agency as saying.

Meanwhile, Sofyan predicted that large business owners would
continue to keep their money outside of Indonesia because "most
of them owe massive debts to the Indonesian Bank Restructuring
Agency".

He also said large businesspeople did not yet want to return
their money to Indonesia because they still were wary of security
in the country.

Sectors that he sees as currently insecure for investment
include plantations and agriculture. But he did not supply
reasons for this assessment, only saying, "Businesspeople in
these sectors still refrain (from investing) because they are
still afraid and traumatized by past violence."

In addition, Sofyan said the country's business climate was
not yet conducive for new investment because of the still weak
law enforcement.

While Indonesians are still reluctant to make new investments,
Sofyan said it would take even longer for foreigners to invest in
the country. "They still have a wait-and-see attitude."

Nevertheless, he expressed confidence both locals and
foreigners would begin investing in the country when the economy
showed significant signs of recovery, and security and law
enforcement improved. (rid)