Chinese-Indonesians 'loath' to repatriate funds

Chinese-Indonesians 'loath' to repatriate funds

SINGAPORE (AFP): Indonesia's ethnic Chinese, believed to have stashed billions of dollars here, are reluctant to repatriate their money because of political problems at home, an expert said Thursday.

Frederick Wu, vice president of economic research at Singapore's DBS Bank, also said it was still too early for foreigners to invest in Indonesia, where separatist violence and religious strife has dogged President Abdurrahman Wahid's administration.

"I suppose I would look very closely but I wouldn't put my money in there yet," Wu said. "I don't think even the ethnic Chinese are repatriating their money. It is just too premature, too early," he said.

"There is a ticking time bomb that needs to be defused," he told reporters on the sidelines of a seminar hosted by Singapore's Trade Development Board.

"And I hope the government is doing the job in defusing the time bomb. In terms of both the political, social and economic problems, it is difficult to be optimistic," he said.

Some 80 billion dollars are believed deposited in Singapore by ethnic Indonesian Chinese who fled bloody riots preceding and following the ouster of former president Soeharto in May 1998.

In his first overseas assignment after his election to office last year, President Abdurrahman flew to Singapore in November to try to recover the funds.

Singapore Prime Minister Goh Chok Tong kicked off a two-day visit to Indonesia Thursday to help Jakarta win back foreign capital crucial for economic recovery.

Armed separatists are fighting for an independent Islamic state in the oil-rich Aceh province in Sumatra island while Maluku province has been rocked by Muslim-Christian clashes.

Abdurrahman said in an interview published in Singapore's Straits Times daily that the unrest in the provinces could be quelled within two months.

The Indonesian leader said reports of unrest in the archipelago had also been exaggerated by the foreign press.

But Wu said: "They need to solve the political problems pretty fast, and so that with the return of stability, then you will see more capital inflows, foreign investments."

Manu Bhaskaran, group head of research at SG Securities, told AFP he expected "a succession of many crises" in Indonesia but was confident that they would be resolved.

He said he did not expect to see Indonesia "explode" either politically or economically but expected the country to take another five to six years to achieve economic levels seen before financial crisis erupted in mid-1997.

"There is not going to be any quick recovery, but neither is there going to be some kind of collapse," he said.