Goldstein calls on investors to stay

Robert S. Finnegan, The Jakarta Post, Jakarta

Businessman Harvey Goldstein is a 30-year veteran of successful business operations in Indonesia. Among other posts, he has also served as President of the American Chamber of Commerce in Indonesia, Vice Chairman of the Indonesian Chamber of Commerce and Industry U.S. Committee (KIKAS) and Chairman of the Asia Pacific Council of American Chambers of Commerce (APCAC). He is currently President Director of PT Harvest International Indonesia.

Question: What kind of impact do you anticipate for the Indonesian economy as a whole and the Bali economy specifically from the terrorist bombing in Kuta?

Answer: In the short term it will be extremely difficult. This sad event has played across the world and Indonesia has probably never received so much press, and that combined with some of the Western and Asian embassies advising their nationals to avoid travel to Indonesia and Bali has a chilling effect. However, I do believe that Bali has some intrinsic value and beauty and the people themselves like all Indonesians are very resilient. In fact, this may be looked upon as a new beginning for Bali and for Indonesia.

In the aftermath of this attack Indonesia has had to do some very difficult introspection and admit that there are some serious problems here. So among the businesspeople who are committed here we believe that out of the ashes of Bali will emerge a newer and stronger Indonesia.

Obviously perceptions have changed. What stands out?

One of the problems we are facing is fear, insecurity. And these emotions are easily ignited in foreigners visiting Indonesia. This is not a problem however, with the people who are committed and have investments here. The boardrooms and stock exchanges across the world though are not always impacted by the personal feelings of these committed individuals; it's more the perception of the major investors who take a certain position on Indonesia that may have a certain impact in terms of sentiment. So there is a short-term impact. We all know that the world is a less secure place after the WTC tragedy.

There have been conflicting statements issued by Western embassies with regard to safety issues for foreign nationals. What do you think is happening here?

American diplomats and the State Department in particular are bound by regulations and laws that require them to give advice to citizens, the same advise that they take. So basically if they are told to scale back they have to advise other Americans to scale back as well. I believe that law came into effect after the Lockerbie attack where there were some accusations the U.S. government was withholding information. So we sometimes find that the advice they receive is somewhat dramatic and too conservative. The American ambassador has done a very good job, his heart and mind are in the right place, but he is balancing a lot of factors.

Not only is he required to look out for the safety of his people; he also has to respond to Washington. There is a lot of intelligence he has to filter and if he sits on any of it there could be a problem.

What is the sentiment here among the local businesspeople?

We don't find large groups of businesspeople pulling out of Indonesia. People who are doing business here want to find a way to continue to do business here, but personal safety is a factor and everyone has a different level of risk taking. It is all these immediate reactions that are an impediment to the natural flow of business and if you multiply that out you will see that there will be some constrictions and that is unfortunate.

How is the Jakarta Stock Exchange looking?

Indonesia is still susceptible to other shocks. The government is taking concrete steps now to address the terrorist threat here and I think that the stability of the market, even though it has taken a hit reflects these efforts.

Is it enough?

What the international community needs to understand is that the Indonesian government is taking prudent steps, reacting swiftly -- which they are doing now -- to combat the threat. They are organizing themselves to take appropriate action. When the international community sees this they will be better prepared not to react emotionally or with shock in the face of further threats. In the days following September 11 members of the United Nations did not evacuate their personnel from New York City. In fact, once it was clear that the US government was making the maximum effort to protect its citizens and guests from potential terrorist threats, world leaders and ambassadors stood shoulder to shoulder proclaiming to the world that they would not be intimidated in the face of these cowardly attacks.

Once the UN membership realizes and acknowledges the steps Indonesia has recently taken and will be taking to fight terrorism, then Indonesia should not expect less.

Has new investment been impacted by the Bali attack?

New investment coming in has almost been frozen at this point. However, expanded investment in the natural resource sector is not. Oil and gas, hard rock mining, those companies are committed and continuing to expand. Everything is going on as normal but the people in Illinois or Indiana don't know this and they think Indonesia is a war zone. Every day there are crimes and riots in the United States -- look at the sniper on the loose now -- and people aren't canceling plans to visit the U.S. because of this. And that's the sad thing about this myopic syndrome of people only seeing the negative side of Indonesia.

This is not the only terrorist attack that has taken place in the world. There are terrorist attacks in the Middle East, the United States. So we have to put all this into perspective. All these places where there are terrorist attacks -- we don't just cross them off as destinations.

We also have to put the efforts of the Indonesian government in the proper light. They have taken tremendous strides in combating terrorism and the fact that there is normalcy in business and social activities needs to be acknowledged.

What role do you see the international media playing in influencing foreign investment at this point?

The media has consistently played more toward the dramatic rather than the quiet business negotiations and expansions. The media is in the business of selling news and by their coverage of the tragedy in Bali they really captured the wrong image of Indonesia. So the media to date has continued to negatively impact the perception of Indonesia as a safe destination for foreign investment and that continues to be the case as we speak.

"Is Megawati up to it?". "Why is she going to Mexico?" You know all these questions about leadership continue to play on the negative while there are some very positive things happening now -- the willingness of the government to directly take on the radical elements here, the willingness to bring military intelligence back into the picture, the cooperation between the military and police to protect strategic sites.

All of these actions play positively to foreign investors. No one expects to have 100 percent security anyway, even in New York. It's just the combination of Bali and having foreigners targeted that is tremendous fodder for the sale of newspapers. It's a fact that Indonesia continues to be a moderate Islamic country and is still a safer place than New York. This somehow escapes the international press. It's the CNN syndrome, where everything is burning.

How about a forecast for the future of foreign investment?

The next six months to a year is going to be very difficult, depending on what happens of course. I am assuming that we are going to experience more terrorist attacks, so it all depends on how the government reacts to it. When I was in New York after the WTC attack, of course it was different but I was not afraid to go because I knew that the government had taken action and I think that people have to look at Indonesia in the same light.

People are very angry at what happened in Bali, no one has even claimed responsibility for this attack, so that shows how much popular support it had.

And on the positive side?

I think that all over Indonesia we have committed foreigners who each in their own way has a positive story to tell and they can act as honorary ambassadors for Indonesia by sharing what is happening to their companies during these times. They can go out and tell other businesses, other foreign investors, their governments and the press about the positive things happening in Indonesia.

We have an obligation not to yell fire in a crowded movie theater, and the press has an obligation to balance the story -- apply objectivity. This in itself would be a positive development. We have here in Indonesia a "United Nations" of investors and we can harness these people, make them our honorary ambassadors to their respective countries to put out the truth about our adopted country. These are the people that can do it.

What would you personally say to foreign investors who are contemplating opening or already own a business here in Indonesia?

I would say come, invest in Indonesia. There is less chance of being hurt here than flying into New York. I would say that your existing business here depends on you providing an example for others, that Indonesia is a good place to do business. So Mr. CEO, who has a good business here in Indonesia, come on in to Jakarta today to be photographed with us. Give an endorsement to Indonesia, because you are making money for Indonesia. Come on down to Jakarta as a CEO, to help us -- attend a Chamber meeting, a press conference -- stand up and be counted. That would be a great help to us all.