Indonesia: A fertile ground for consultancy business

Indonesia: A fertile ground for consultancy business

Rudijanto, Contributor, Jakarta

The country's far from perfect legal system, complex business
environment and need for corporate good governance and
transparency, highlight some fertile ground for consultancy
businesses, from simple law consulting and accounting firms up to
risk-control consultancy businesses.

While consultancy companies don't necessarily consider the
economic conditions of the country ideal, they say global trends
are influencing the business climate here.

"No, we do not see any (negative) impact from domestic factors
such as the economic crisis and the general election on our
business. We believe that our business is improving due to the
global trend for good governance in companies," said Ernst &
Young's director of marketing Bernardus Djonoputro.

Bernardus believes that his company's growth is affected more
by the global change in the world's accounting field, than by
domestic factors, especially after the famous U.S.-based Enron
accounting scandal.

The U.S.-based gas pipeline company manipulated its reported
earnings in an effort to fool investors and profit from higher
stock prices. The case, that has triggered a big change in the
accounting field, began to transpire in October 2001.

Such a scandal has raised the global demand for more
transparency and good governance among corporations, including in
Indonesia.

That is why, Bernardus said, Ernst & Young's growth is due to
the global need for companies to audit and conduct better
corporate governance, regardless of the country's specific
situation.

"For instance, publicly listed companies always need our
auditing services in times of crisis, as well as in normal
situations. Those companies need public accounting firms for the
attestation of their financial reports," he said.

With such a client base, he firmly denies that his company has
benefited from the country's economic crisis and corporate
restructuring programs, including privatization of state-
controlled companies.

"Privatization of state-controlled companies is not yet clear.
We don't see it as big opportunity in the short run. Our business
is linked more with multinational companies," he said.

Ernst & Young assists businesses across all industries - from
emerging companies to global powerhouses - to deal with a broad
range of business issues.

Another consultancy company PT ROH-Control Risks Group (CRG)
claims it can find business opportunities regardless of the
situation. Though admitting that the economic crisis provided
various opportunities, PT ROH - CRG's technical advisor Martin
Hugher says that his company can survive in normal times as well.

"I look forward to the return of investors to Indonesia. We
want people to come here. We have services that can help them,
including those who come for the first time to this country,"
said Martin.

CRG is a London-based international risk consultancy that has
assisted clients from various sectors, including those from oil
and gas, and manufacturing and financial sectors. The company
provide its clients with pre-project due diligence, cross
management planning and problem solving.

"Here, we basically provide information about Indonesia, on
contemporary issues and its security situation. Our clients have
responded positively to this information," Martin said.

Not all consultancy companies benefited from the crisis.
IndoTrade is one such company, with one of its focuses on
providing consultancy to foreign investors who want to do
business in Indonesia, the company is certainly not happy with
the predicted flat-growth for this year's foreign direct
investment (FDI) flow to Indonesia.

Not simply relying on the flow of FDI, IndoTrade has launched
its Service Office, that specializes in taking care of companies
abandoned by their owners for various reasons. Indotrade's
managing director Johan Bukit says that the Service Office has a
bright future.

"In Singapore, hundreds of companies are left by their owners.
The demand for this service has also grown in Indonesia as more
and more companies need this kind of service. Currently, we
handle 20 companies," he said.

He explained that owners left their companies to IndoTrade for
a variety of reasons. For such companies, IndoTrade offers
corporate management facilities such as secretarial services and
tax reports.

"This service enables those companies to run economically
because they do not need to have their own offices and employees.
We are the ones that take care of their needs," Johan said.

But Johan does not view companies left to IndoTrade's
corporate-management services as sick companies. He reveals that
some owners simply have no urgent need to open an office in
Jakarta.

Aside from Service Office, IndoTrade also offers law
consultancy for onshore and offshore companies. The company has
also published a book A Brief Investment Guide & Regulations on
FDI 2004.

In spite of the uncertainty caused by the upcoming general
election and the country's first-ever direct presidential
election this year, IndoTrade and other consultancy companies are
optimistic about business in Indonesia.

"Having experienced the most troubling events, we see the
present condition as much better than the outset of the economic
crisis in 1997 and the elections in 1999. In fact, Indonesia's
economic growth rate is forecast to be higher this year than it
was in 2003," said Johan.

Consultancy businesses have proven that they can find
opportunities amid any situation. Like the Chinese, who describe
crisis in two characters, that mean "danger" and "chance",
consultancy companies are able to see that every dark cloud
passing over Indonesia does, indeed, have a silver lining.