Business revival key to nation's security

Wimar Witoelar, InterMatrix Communications, Jakarta, wimar@witoelar.com

As Indonesia licks its wounds form the nation's latest tragedy, the outside world increases its pressure not just on potential terrorists, but on anyone who happens to be circumstantially linked to the al-Qaeda and the Jamaah Islamiyah. They are not our only problem. The world should know domestic terrorists have plagued us for a long time. As the professor Jeffrey Winters enumerated in his recent article Did the al-Qaeda really do it?, six bombs were detonated in 1998, nine in 1999, 20 in 2000, and seven in 2001.

Not too many people wept for Indonesia internationally then as they do now for Bali. It is actually the same show of terror made worse by the addition of international victims which puts it on an international stage.

But while New York after Sept. 11 received a huge outpouring of support and sympathy, Indonesia receives recrimination and suspicion even as we are still weeping at our huge loss. Travelers are advised to stay away from Indonesia while they were not told to stay away from New York. A scaremonger in Brisbane's Courier-Mail even described Jakarta as a "city of fear". Actually the most fearful thing about Jakarta is that it may be pushed off the map before people get a chance to know its chaotic charm.

Wile international terror is still under investigation, international business has condemned Indonesia as a hopeless place to do business. We are losing big in the international public relations and media game. As long as the al-Qaeda elude George W. Bush, we get pushed on a downward spiral with the collapse of our international business image.

Singapore might complain about being put on the Australian government's travel advisory list as a dangerous place to visit, but at least their business credibility is still intact. They just reached an agreement with Australia on a free trade deal, which could generate hundreds of millions of dollars in export revenue for both sides. The Australian Trade Minister sent a clear signal that Australia is going to remain there and increase their engagement throughout Southeast Asia. They are negotiating with Thailand and remain open to offers to negotiate similar deals. Is Indonesia on their agenda? Probably not, to put it succinctly.

At the ASEAN summit in Cambodia, Japan will tantalize Southeast Asian leaders with talk of free-trade agreements and closer relations. Japanese Prime Minister Junichiro Koizumi has announced that the proposed trade agreement will be high on the agenda when he meets with ASEAN leaders on Tuesday. We have no idea how our own President Megawati Soekarnoputri will perform; we do not expect overly joyous news.

It is highly uncertain whether Indonesia will be able to share the recovery of international business. But this is not exclusively related to the terrorism issue. We have many foreign business people still operating in Indonesia, and multinational firms committed to stay for years, even decades. They feel quite safe, at least normal, in their everyday rounds.

These people make up the international business community that we should court. A management guru at IBM once revealed a study that showed gaining new customers costs 12 times as expensive as retaining old ones. We have so many international names here that mentioning them would make this article look like an advertisement. But they are pressed against the wall when their bosses and owners ask back home ask why they still have hope in Indonesia.

For business people who have long experience and good knowledge of Indonesia, the issue is not terrorism, which has turned global. They are facing a more serious problem, a truly debilitating disease in the form of an uncertain business environment, poorly articulated policies left undefended. The business-political system leaves the reform attempts vulnerable to cooption and sabotage.

The battle for clean government and good corporate governance has always been difficult but now it has become a losing one. Legal uncertainty has reached the level of celebrated cases. Other crises are brewing in the background. There is a prevalence of regional insubordination to central authority. Further problems come from political opportunists who exploit public ignorance about foreign investment and privatization.

In terms of business recovery, these are the real terrorists whom the international war on terror leave unscathed. When you look at the due of corruption and violence, corruption is left unchecked by our government while perpetrators of violence are getting merciful treatment by foreign governments eager to work with the military.

It is disappointing to hear of groups who are fishing in troubled waters. Instead of strengthening the market economy, they seek to stop the government privatization program through class action suits. These misguided ideas are expressed in demonstrations and unilateral declarations against legal authority. There is wry humor here considering that the government has not been particularly forceful about privatization anyway.

Populist politicians play to the uninformed public by depicting privatization as loss of local ownership and international acquisition as a takeover by foreigners to send Indonesians deeper into poverty. They draw parallel lines of xenophobia along political and economic themes.

The public stands to increase their chances against poverty through privatization. The market takes control away from bureaucrats and corrupt management. That is why these groups of people drag their feet on privatization. They are worried about their own privileged positions, not the public interest. The government would be much less in debt if their privatization were pursued with more energy. In fact, the reason the national budget faces problems is because privatization targets for cash revenues are not being met.

It takes a lot of patience and sensitivity to explain these things, but it has to be started. The worry now is that Indonesia is going to be trampled in the world hunt for terrorists, and that business will suffer. We should position ourselves such that we all join hands in making the world safe from terrorists.

But it is business recovery that will make Indonesia a better place for its people. And it would make it less fertile for hate- spreading radicals and scare mongering overseas writers.