International terrorism issue hinders national economic recovery: Analysts

Tertiani ZB Simanjuntak, The Jakarta Post, Jakarta

The issue of international terrorism in the wake of the Sept. 11 attacks on the U.S. has complicated Indonesia's attempts at economic recovery, analysts said on Tuesday.

A noted economist from the Centre for Strategic and International Studies (CSIS), Mari Elka Pangestu, said international terrorism had become a key issue the government had to consider in its attempts to attract foreign investment.

Addressing a one-day conference here, Pangestu pointed out that even before Sept. 11, the government was aware that political stability, transparent governance, a consistent economic policy and good infrastructure were concerns of foreign investors.

"If the government cannot handle the issue of terrorism, foreign investment will fall because of the high risk of doing business in Indonesia. Such a situation will also hamper capital inflow.

"Terrorism has cost us economically because it has certainly affected our efforts at economic recovery," she said during the conference, titled The Economic Cost of Terrorism: Indonesia's Responses. The conference was organized by CSIS and U.S. Aid for International Development (USAID).

Indonesia is thought by many to be the country of origin of members of international terrorist groups, as well as a safe harbor for international terrorists. Indonesia also has been put on the list of noncooperative nations in the global movement to counter terrorism or terrorism-related acts, such as money laundering and arms trafficking.

It was only recently that Indonesian lawmakers endorsed a money laundering bill, which is expected to be followed up by the establishment of a body that will have the authority to investigate suspected ill-gotten funds or financial resources used to finance terrorist groups.

The keynote speaker at the conference, Juwono Sudarsono, who was the minister of defense under president Abdurrahman Wahid, said Indonesia faced a challenge in reducing the number of people joining hard-line groups with the potential to threaten the country's stability.

"Only 10 percent of the Indonesian population (of over 210 million) have access to and enjoy the state's economy. The poor tend to take shortcuts in obtaining this access by joining hard- line groups, including Islamic ones. The government should empower these people. And I'm optimistic that it can be done within 10 years," he said.

Juwono said the country was in dire need of a leader who did not only rely on his or her personality, but also had the capability to develop institutions that would serve as the tools to transform political visions into concrete policies that could help improve the country's economy.

Pangestu shared Juwono's opinion, saying it was a common belief here that Indonesia would not undertake economic reform unless the International Monetary Fund asked it to do so.

"What we need now is a leader that can create a sustainable economic recovery to let the capital flow in," she said.

Juwono said Indonesia should respond to the international issue of terrorism by changing its perception that globalization only benefited a handful of countries, adding though that no country should be intimidated by others.

He said that with respect to the international community's concerns about Indonesia, outsiders should not take the lead in setting the conditions for the reconciliation of conflicting groups in troubled regions like Maluku and Aceh.

"It's high time to let the minister of home affairs, not the minister of foreign affairs, take responsibility for the government's negotiations with the Free Aceh Movement separatists. The current situation, in which the foreign ministry acts as the negotiator, implies that the government recognizes the Aceh separatist movement as legal," he said.