General election seen as no threat to business climate

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)