E. Timor not seen effecting big investors in Indonesia
E. Timor not seen effecting big investors in Indonesia
AUCKLAND (Reuters): The violence and bloodshed in East Timor is leading potential investors to put their plans on hold, but existing investors are not fleeing en masse from Indonesia, Prudential Asia Investments Ltd President and chief executive Douglas Fergusson said.
"In the shortest of terms, there will be potential investors who had been hoping and looking forward to and, indeed, wanting to contribute to the recovery of Indonesia who will say, well, gosh we better wait a little bit and figure out what's going on here," Fergusson told Reuters in an interview on Sunday.
"Will it have a long and lasting effect? I think that answer will be determined by what happens next."
The East Timor crisis would definitely be a setback for Indonesian economy in the immediate term, but if the situation settled down quickly it would not cause irretrievable damage, he said. He did not see any knock-on effect for the rest of Asia.
"I haven't heard (that from) anybody who I've talked to, and it certainly would not be my opinion that, because of what's happened in East Timor, that'll affect my investment in Asia as a whole ... I think we view East Timor as Indonesia-specific situation, unlike the Asian crisis."
The problems with Indonesia's overall investment infrastructure -- a combination of social, political, economic and financial factors -- were well documented and those who had concerns about the country would have already pulled out, Fergusson said.
"I'm not anticipating necessarily pulling out because, in fact, a lot of the value has already been eroded. It's more of a question of are they willing to go back in and build."
Prudential Asia Investments, a Hong Kong-based investment arm of Prudential Insurance Co. of America, has some investment in major projects in Indonesia but its involvement was "not significant at all", Fergusson said.
Although Prudential was watching with great concern, East Timor was not making it liquidate its investments, he said.
Fergusson is in New Zealand to attend CEO Summit held on the sidelines of the APEC leaders meeting on Sept. 12-13.