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.