Election jitters grip businesses, says Sofyan

Election jitters grip businesses, says Sofyan

JAKARTA (JP): Leading businessman Sofyan Wanandi described
yesterday the May 29 general election as Indonesia's "most
critical", and admitted that local businesses are jittery.

"They fear the process preceding the election and its outcomes
might harm their businesses," Sofyan told The Jakarta Post
yesterday.

"In the past we could take for granted the country's political
stability and President Soeharto's strong leadership, but we feel
we can't do so any longer," he said.

Sofyan, who is chairman of the Gemala Group of companies, said
local businesspeople were particularly concerned about incidents
that might occur during and after the election process.

"If people don't accept the results or are unsatisfied, they
could be restless and this, in turn, could cause them to direct
their anger at businesses," he said.

He said large businesses had already taken precautions to
avoid getting bruised should any upheavals occur following the
election.

This included listing their companies on stock exchanges,
establishing joint ventures with foreign firms and moving their
capital out of the country.

"These steps help to reduce risks," he said.

Unlike local businesses, foreign investors have more
confidence in the situation.

Paul Beibor, the senior vice president of Rabobank, said
yesterday the elections had "very little effect" on the
investment climate in Indonesia.

"Foreign investors are very confident with the Indonesian
economy. It appears that economic fundamentals are very strong...
Most foreigners are happy with the political scene and are
convinced there is political stability," he said.

He acknowledged there was some volatility on domestic and
financial markets.

"But from the foreign perspective, there is nothing to worry
about," he said.

Beibor said foreign investors were mostly concerned with
Indonesia's economy because they considered that the country had
been politically stable for a long time.

He said foreigners were convinced that regardless of who was
in power, economic policies would remain the same.

"The current economic policies have a very broad basis among
most of the country's political people... Foreigners feel there
is a consensus among politicians as to where Indonesia's economy
is headed," he said.

Sofyan said that although Indonesia appeared to be prosperous
and growing, many individual companies were currently having
problems with their cash flows.

"Internally, these companies are very unhealthy," he said.

He said the stability of many large firms could not be
calculated in business terms because they relied heavily on
protection and support from people with power.

"The political clout of those in power is so strong that local
businesses will do almost anything to entertain these powers in
order to avoid getting into any sort of trouble," he said.

Sofyan said most independent businesspeople wanted a change in
Indonesia's politics, but others -- particularly those who gained
advantages from the current system -- were not looking forward to
any change.

"Businesspeople who want change want to see a transparent
system which produces consistent policies... What we see now is a
very gloomy picture," he said. (pwn)