Businessmen call for restoration of order, security
Businessmen call for restoration of order, security
JAKARTA (JP): The Indonesian business community urged
President B.J. Habibie on Tuesday to immediately restore order
and security in the country as a prerequisite for businesses to
resume normal operations.
Chairman of the Indonesian Chamber of Commerce and Industry
(Kadin) Aburizal Bakrie said the government had to stamp out the
rising incidence of rioting and looting which had been
endangering businesses.
"A feeling of safety is very essential for businesses to
resume normal operations," he told reporters after meeting
Habibie.
The chamber's appeal came after almost one week of rioting on
the island of Ambon that left more than 50 people dead and
hundreds of buildings and cars damaged with material losses
estimated at around Rp 500 billion.
"I am glad to tell you that the President has pledged the
government will act firmly in dealing with any rioting and
looting," he added.
The country has been overrun by a seemingly endless series of
outbreaks of unrest and violence since the fall of the former
dictator Soeharto last May. Analysts believe that most of these
have been instigated by various vested political interests as the
June general election approaches.
The wave of social unrest is now becoming an increasingly
serious threat to businesses as trucks hauling goods have often
been looted, warehouses and properties burned, and customers
frightened away.
Export-oriented manufacturing companies have complained that
many of their customers overseas have diverted orders to other
countries for fear that deliveries from this country would not be
able to meet the set schedules.
Many enterprises have folded and those still in operation are
taking the brunt of punitively high interest rates, and facing
bankruptcy litigation from impatient foreign creditors. The
moribund banking industry not only has virtually stopped new
lendings but is calling in loans.
The riots have further eroded whatever little confidence there
is still in the government and the country's economic prospects
and are undermining the painful economic reform programs badly
needed to stabilize the economy.
Minister of Investment Hamzah Haz admitted on Tuesday that the
unrest had caused great concern among foreign investors.
"If the social, political and security conditions deteriorate
this year, foreign investment will further decline," he told
reporters following a separate meeting with Habibie.
He was apprehensive that the US$5 billion in foreign
investments approved last year might not be realized this year.
"I think foreign investors will wait on the sidelines until
after the completion of the general election," he added.
Aburizal also called on the government to make strong efforts
to reinvigorate the real sector of the economy.
He said the government had so far focused on macro economic
policies and banking reform at the expense of the real sector.
Citing an example, he pointed to the well-publicized
government plan to create an export financing agency to help
exporters secure financing for the importing of raw materials
that had never materialized.
The government has said that the export financing agency will
start up operations only after the completion of the bank
recapitalization program in March.
Aburizal, however, doubted whether the recapitalization
program could be completed as scheduled, given the stiff
opposition of the House of Representatives to the proposed budget
allocation for the program.
The business leader expressed concern that it might take
another one and a half years to settle the non-performing loans
of the domestic commercial banks. (rei/prb)