Businesspeople may regain confidence in six months

Businesspeople may regain confidence in six months

LONDON (JP): Indonesia, which was hit by anarchic riots on
July 27, is expected to regain the confidence of foreign
investors within six months, says the chairman of the Indonesian
Chamber of Commerce and Industry.

"The riots, which involved arson and bomb threats, have
affected business confidence but we are sure that the security
forces will be able to fully restore order," Aburizal Bakrie told
reporters here Thursday.

Aburizal, here to test the prototypes of the Bakrie Group's
cars for production in Indonesia, said foreign investors had
raised questions about political stability following the riots
involving the rival camps of the Indonesian Democratic Party.

The riots erupted on July 27 when supporters of Soerjadi, the
new PDI chairman elected in a government-sponsored congress in
June, raided the party's headquarters in Jakarta to wrest control
from its democratically-elected chairperson Megawati
Soekarnoputri.

Aburizal said that if riots do not flare up again, foreign
investors will regain confidence in Indonesia within six months.

"Investors see Indonesia as an attractive export base in the
ASEAN Free Trade Area in 2003 with a market of 500 million ," he
said.

Aburizal, who is also chairman of the Bakrie Group, said that
differences of opinion among political institutions would not
affect the business climate as long as they channeled them
through the right mechanisms.

"But if the differences are expressed in an anarchic way,
they will surely hurt business confidence," he said.

He acknowledged, though, that apart from political
uncertainty, the problems of inconsistent policies, market
distortions and corruption are also detrimental to investment.

"Maintaining consistent policies and uprooting corruption is
therefore just as important as creating political stability to
stimulate investment," he said.

Citing an example of policy inconsistency, he pointed to the
Timor car, which even though it is made at the Kia Motor plant in
South Korea, is classified by government regulations as a
"national" car, and is thereby exempted from import duty and the
luxury tax.

The government, through a presidential decree, has licensed PT
Timor Putra Nasional, a company controlled by President
Soeharto's youngest son Hutomo Mandala Putra, to produce its
"national" car at the Kia Motors plant until its assembly plant
comes on stream in West Java. (riz)