Business unaffected by blast, focus still on election

Business unaffected by blast, focus still on election

Zakki P. Hakim, The Jakarta Post/Jakarta

Business leaders said that the impact on the economy of last
week's bomb blast outside the Australian embassy would be
minimal, with business players continuing to focus on the Sept.
20 presidential election.

"Most investors and businessmen will wait until after the
presidential election, and then assess the newly elected
president before deciding what to do," said businessman Sofyan
Wanandi, who is also the chairman of the National Economic
Recovery Committee (KPEN).

Sofyan explained that after the election, businesses would
enter a "cooling-off period" before deciding whether to invest in
the country next year or wait for another year.

However, he urged the authorities to work hard to quickly
catch the perpetrators of the bombing so as to prevent the
reoccurrence of similar incidents in the future.

He was speaking during a seminar on Tuesday titled "Post-
election Business Prospects,"

President Megawati Soekarnoputri will have her work cut out
for her against her former chief security minister Susilo Bambang
Yudhoyono, who has been leading in recent polls.

Meanwhile, property magnate Ciputra also implied that the
impact of the blast would be very limited as people, especially
businesspeople, had become more rational.

"People can see that the attack was more about international
than domestic issues," he said.

"If the presidential election (runoff) goes ahead smoothly as
with the previous two (elections), I believe we will have a
better investment climate," he said.

He said that the property market remained very attractive as
current macroeconomic conditions were far better than compared to
the pre-crisis period before 1997.

Ciputra said that in the last five years his group's property
sales had tripled compared to the pre-crisis period.

Separately, National Development Planning Agency (Bappenas)
head Kwik Kian Gie said that the blast had had no significant
effect on Indonesian economy, with business going on as usual.

Kwik said that foreign investors in the country had not been
negatively influenced, and would stay here as long as there was
money to be made.

The country has suffered from a lack of investment over the
past several years as a result of various factors, including a
lack of legal certainty, security fears, labor disputes and the
chaotic implementation of regional autonomy.

This lack of investment has caused the country's economy to
grow at a mediocre rate of around 4 percent per year over the
past several years.

Before the 1997 Asian economic crisis, investment was one of
the country's main economic engines. Now it accounts for less
than 10 percent of the country's gross domestic product (GDP),
with domestic consumption contributing more than 75 percent.

The government recently announced a 34 percent year-on-year
drop to US$3.05 billion in approved foreign direct investment in
the first half of the year.

A suicide bomb attack at the Australian embassy in Kuningan,
South Jakarta, last week killed nine people and injured at least
185 others. The attack put brief pressure on the rupiah and stock
market.