Foreign investors losing interest in RI: Consultant

JAKARTA (JP): A political risk consultancy firm warned on Thursday that the country's lingering political woes and uncertainties, which have already discouraged new investors from entering the country, could also prompt existing investors to review their Indonesian operations.

James Van Zorge, senior partner of Jakarta-based Van Zorge, Heffernan and Associates, said the memorandum of censure issued by the House of Representatives in February this year criticizing President Abdurrahman Wahid over his alleged involvement in two financial scandals had aggravated the country's political uncertainties, further discouraging investors.

"The issuing of the second memorandum to move for impeachment will add more uncertainty as to the country's future leadership. This uncertainty could fuel the departure of foreign investment from Indonesia," Van Zorge said in a statement.

Abdurrahman has been accused of involvement in graft in relation to a cash donation from Brunei's Sultan Hassanal Bolkiah and the misuse of funds belonging to the National Logistics Agency (Bulog).

Van Zorge said investors were basically risk-takers, but they needed "reasonable political certainty to balance the risk".

"They don't care too much who is in power as long as it is a government they can work with and have a reasonably certain outcome. They are also willing to live with corruption, as long as the extent of corruption can be factored into the cost of doing business," he said.

In order to identify the country's problems and devise a strategy to overcome the problems, the consultancy firm will hold a two-day seminar titled "Indonesia Next: Emerging from the Crisis," on April 19 and 20.

The seminar will feature many noted figures, including Lt. Gen. (ret) Prabawo Subianto, a former commander of the army's strategic reserves (Kostrad); East Timorese independence leader Xanana Gusmao; former commander-in-chief of the Indonesian military Gen. (ret) Wiranto; Coordinating Minister for the Economy Rizal Ramli; the World Bank's country director in Indonesia Mark Baird; and the former IMF managing director for Asia Pacific Hubert Neiss.

Also on the list of speakers are several leading experts on Indonesia, including Jeffrey Winters, Adam Schwarz and Harold Crouch. (jsk)