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)