Executives reconsider investing in Indonesia

Executives reconsider investing in Indonesia

SINGAPORE (AFP): A sizable number of Asian executives are reconsidering investing in Indonesia following recent riots there, according to a poll released here yesterday.

The poll commissioned by Asia Business News (ABN) and the Far Eastern Economic Review said 43.3 percent of 300 top executives interviewed from 10 economies in Asia said they were now reconsidering investing in Indonesia.

Results of the poll were released just before the broadcast of an ABN interview with Indonesian President Soeharto's son Hutomo (Tommy) Mandala Putra in which he was hopeful there would be a successor to his father in 1998.

"He has been working too hard for the country for more than 30 years by 1998. So hopefully there is someone who can replace his position in 1998," Tommy said in the interview with the Singapore-based satellite TV network.

"We'll see. But whoever leads the country, I think the policy will be the same," said Tommy, who is also the chief executive of PT Humpuss, the company developing Indonesia's first "national car."

Soeharto, who turned 75 last month, is serving his sixth consecutive term as president and will face presidential elections in 1998.

He has been the sole candidate for the nation's top slot since he came to power in 1966, and formally assumed the presidency in 1968.

There has been mounting speculation about whether Soeharto will run for another term as president following the death of his wife and close advisor, Tien Soeharto, in April and a medical check-up he underwent in Europe in July.

Soeharto faced what is believed to be the most brazen challenge yet to his iron-fisted rule two weeks ago when riots swept through Jakarta after a military-backed raid on the headquarters of the Indonesian Democracy Party (PDI), occupied until then by supporters of ousted PDI leader Megawati Soekarnoputri.

Three people died in the violence and at least 20 people were injured in the worst civil unrest seen in Jakarta for more than 20 years. Unofficial figures put the toll much higher.

Soeharto, who overthrew Megawati's father in 1966, apparently is afraid that her growing popularity among Indonesians unhappy with his regime is a threat to his authority.

If she cannot win reinstatement, she will not be eligible to run for re-election to parliament next year or to challenge Soeharto in the 1998 polls.

Speculation over Soeharto's health and the subsequent riots jolted the country's markets and shook investor confidence. More than 90 percent of Asian executives polled for the business survey felt that the Indonesian government had gone too far in suppressing political opposition.

Up to 81 percent of executives in Indonesia, Malaysia and Singapore felt Jakarta "went too far," ABN said.

When asked to choose between the authorities and the supporters of Megawati on who was more to blame for the recent violence, 81.3 percent of executives region-wide placed more blame on the Indonesian government, ABN said.