Indonesians who fled abroad likely to return: Consultant
Indonesians who fled abroad likely to return: Consultant
SINGAPORE (Reuters): The majority of Indonesians who left the country would most probably return within the next few weeks as the threat of more riots and destruction recede, an Indonesian expert said yesterday.
James Castle, chairman of the Indonesian-based Castle Group which provides business consultancy and research services on Indonesia, said in an interview the exodus problem was probably near its end.
"I expect 95 percent of Indonesians citizens to be back within weeks. The foreigners won't come back as fast primarily because they will find there won't be the businesses there to support them," he said.
He said many of those who had fled Indonesia in the past week won't have the resources to start up businesses elsewhere.
"They may wait a few days to see if this is for real. But it seems the threat of riots and destruction has gone way down. There will be a honeymoon period and these people will be eager to get back to business as soon as possible," he said.
Castle, who has lived in Indonesia for 20 years, expected to return to Indonesia on Saturday after a business conference in Singapore on Friday.
Commenting on Indonesian President Soeharto's resignation yesterday morning, Castle said "it was a far smoother transition than imaginable so far" as the process accepted the existing parliament as a valid institution.
Looking forward, he said there were tough challenges for the new government, including new parliamentary elections probably within six months. "It will be a major test and I hope it won't distract economic restructuring."
Castle said top economics minister Ginandjar Kartasasmita was highly regarded by the International Monetary Fund (IMF) and World Bank and both "should be happy if he stays on".
"If they leave Ginandjar in place...the IMF will be able to move forward with confidence because they trust Ginandjar," he said.
Castle said he expected things to move quickly in certain areas as Indonesia fulfills more IMF demands faster.
"Certainly, the monopolies will unambigiously be gone. They would be able to move faster to restructure the banks and bring in foreign expertise."
Castle said if the new government wanted to go after the assets of the Soeharto family, it would not be too difficult as most of the companies owned by the family members have large loans from the state banks.
"Like everybody else they are having trouble paying back. It would be very easy for the banks just to seize the collateral and they can be resold later."
Castle said Soeharto's family control of the economy was probably not as large as often estimated.
"You can look at the published assets of the 200 biggest groups in Indonesia -- all the family interests there are about 15 percent of the assets of the 200 biggest groups."
He said the Salim Group alone accounted for over 20 percent of the assets. Salim is headed by Indonesian Chinese tycoon Liem Sioe Liong, also closely associated with Suharto.
Castle also said he expected more hardships in store for Indonesia with the economy shrinking some 10 percent this year.
"That is a huge decline in GDP (gross domestic product) terms. In the best possible scenario, it will be take at least five to eight years for the buying power of the average Indonesian to get back to June 1997 levels," he said.
He also said the best case scenario for the rupiah was to strengthen to about 7,500 to the U.S. dollar by year end.