Believe in your country!

Believe in your country!

I am a businessman and a former diplomat, concerned about
investment in Indonesia.

Since the start of President Susilo Bambang Yudhoyono's
administration, hopes have been high for increasing the growth
rate of the economy in order to create enough jobs to accommodate
the increased population and to help reduce poverty. The means by
which this is supposed to be achieved is primarily through
increased foreign direct investment.

Unfortunately, none of the figures available seem to indicate
that this investment is forthcoming at the rate hoped for. In
addition, the continuing strongly positive trade balance that
Indonesia is so proud of indicates that a lot more capital is
leaving the country than entering it.

Indonesians, those that have money, and there are quite a few
of them, continue to send their money abroad, for safe-keeping or
to invest it there. Indonesian businesspeople, when asked to put
up some of their own money to invest in a project or joint
venture, will rather turn to the government than take the risk on
their own (I speak from personal experience). And turning to the
government means delaying a project since the bureaucratic red
tape in Indonesia, as has been established recently by an
international body, is indeed enormous and intimidating. So why
should a foreign investor or venture capitalist come to Indonesia
if Indonesians themselves don't want to risk their money?

All the above is well known in the international community and
continues to serve as a barrier to foreign investment, without
even mentioning other legitimate concerns foreigners may have,
for example security or a problematic legal system. If
Indonesians are proud of their country and believe in it (as they
have every reason to), they should put up at least some of the
money. Foreigners are much more likely to invest when they see
their Indonesian partners put up some money of their own and take
risks.

As a businessman who is interested in advancing agriculture
and postharvest processing in Indonesia, I would be happy to meet
local businessmen who are willing to take a risk on their own and
not run to the government first. They would be surprised how
quickly they can get their money back (and make a lot more) if
only they dared just a little, and we are talking agriculture
here, not gambling.

The government, on the other hand, could make a serious
contribution to the economy by increasing the budget deficit from
the strangely low 0.8 percent of GDP, which looks like a number
right out of the IMF kitchen, and pump more money into
infrastructure projects, which are sorely needed to make
Indonesia accessible, reduce overland travel times and provide
electricity and drinking water to all. All this while curbing
governmental bureaucracy, which turns every business venture that
involves the government into a long-distance obstacle course.

I urge you, Indonesian businesspeople and government officials
alike, believe in your country, invest in Indonesia, we will
gladly follow suit.

EMANUEL SHAHAF, Jerusalem