General election seen as no threat to business climate

JAKARTA (JP): Indonesia's business climate is not likely to change much after next year's general election as the results have been predicted, business executives and analysts said yesterday.

Businessman Fahmi Idris from the Kodel Group said that whatever the outcome of the election, businesses will be able to adapt to government policies.

"Some businesses actually have an influence on the government's policy-making process," he said at a seminar discussing business prospects after the 1997 general election.

The seminar, held to commemorate the second anniversary of the Gatra newsweekly magazine, featured other speakers, including economists Sjahrir from the Institute for Economic and Financial Research, Didik J. Rachbini from the Institute for Development of Economics and Finance, and marketing consultant Hermawan Kartajaya.

Fahmi said that the election might cause a slight shock to, or worries within, businesses, but that their ability to adjust would protect them from harm.

However, he said, businesses may have a "change in attitude" after the year 2000 because the next elections, to be held in 2002, "will almost surely not see the re-election of President Soeharto".

"I am sure that businessmen will only start making their moves around the year 2000. At that time, they will start to lobby the next presidential candidate and people who might hold top government posts," he said.

He said that he was convinced that the House of Representatives would do a "better job" at that time. The House, he said, would refrain from simply rubber stamping any policy proposed by the government, as it does now.

"But as long as the country is led by Pak Harto, there will be no significant change," Fahmi added.

Similarly, economist Sjahrir said not only would Indonesia's business climate not change, its problems would also remain the same.

"Even if economic growth can be maintained at a high level, the distribution or focus of this growth will not be different from the past.

"The unequal accumulation of productive assets will continue and any efforts to enhance equity will be more of a symbolic gesture than a serious, well planned program," he said.

Sjahrir said partnership programs between conglomerates and small and medium enterprises would continue to fail if basic policies were not changed to support the government's efforts to narrow existing economic gaps.

He said the nine-month transition period during the election of House members in May, 1997, and the swearing-in of the new president in March, 1998, would be an unsettling period for the business sector.

"The nine-month period will be very long and during this time we will have a lame-duck government. This period will be full of political lobbying and uncertainties; economic concerns will be at the bottom of the government's priority list," he said.

Hermawan Kartajaya said that for the first six months of next year, most businesses have predicted a slowdown in operations and an increase in business risk.

"This slowdown will result in a six-month lag which is really not good for businesses because they must face free trade in a few years' time," he said. (pwn)