Korean investors doubt overall situation in Indonesia

Korean investors doubt overall situation in Indonesia

By K. Basrie

SEOUL (JP): Like many foreign businesspeople, South Korean
investors will not spend their money in Indonesia unless the
government improves the current condition of law and order in the
country, helps settle labor disputes satisfactorily, and makes
crystal-clear regulations on the provincial autonomy policy.

Anton J. Supit, secretary general of the Indonesia-Korea
Economic Cooperation Committee (Inkorecom), said here on Tuesday
that the three factors have created a nightmare for many Seoul-
based businesspeople and investors.

"How could we attract more investors, like those from South
Korea, if their friends who already run their businesses in
Indonesia want to leave?" he told Jakarta-based reporters on the
sidelines of a business dialogue with South Korean businesspeople
here.

Anton quoted some South Korean businesspeople and those
already grouped in Inkorecom as saying that they are greatly
concerned about the state of law enforcement in Indonesia today.

"The police, for example, never arrest those who damage other
people's property even though that is obviously a crime.

"Look at Jakarta. Instead of stopping the student brawls and
arresting them, the police simply divert the traffic. Where's the
law and order, then?

"That's a big question to South Korean businessmen," said
Anton, who is also an executive of the National Economic Recovery
Committee which was established by the Indonesian Chamber of
Commerce and Trade (Kadin).

He also urged Indonesian authorities to differentiate between
labor disputes and labor crimes.

"So many laborers have, for instance, burned factories and
damaged machines. And police detain nobody. The law even allows
police to shoot criminals, doesn't it? Why should we be afraid of
human rights abuse if such things really burden us?"

In the provincial autonomy structure set to come into effect
as of January next year, South Korean businesspeople repeatedly
said that they are seriously worried about the consequences of
the policy taking place.

"It's very scary for them. They said the policy remains
extremely unclear for them," Anton said.

The Indonesian government, he said, has no choice but to admit
that there is a seriously unfavorable climate for foreign
investors in Indonesia, which the country badly needs to recover
from its economic condition.

"Otherwise, Indonesia will sink," Anton said.

Should such a situation not be improved, South Korean
businesspeople, including those who already have businesses in
Indonesia, would move to other neighboring countries which can
offer a better business climate, such as Thailand or Vietnam.

According to Asril Noer, an expert at the Indonesian State
Ministry of State-owned Enterprises, South Korea is the seventh
biggest investor in the country after Japan, U.K., Singapore,
Taiwan, U.S., and Thailand.

In the first eight months of this year, Indonesia approved 936
projects proposed by South Korean businesspeople, worth US$6.8
billion, which is much lower than the $37.8 billion recorded in
pre-crisis 1997, said Asril, a speaker at the meeting which was
held in conjunction with the reopening of Garuda's non-stop
Jakarta-Seoul flight at the Lotte Hotel here.

During the dialogue, only two South Korean participants among
the dozens of attendees were willing to raise questions. They
mostly asked about financial matters.

"That's actually a small problem for them. The real obstacles
are those three matters (mentioned above), namely law and order
enforcement, labor problems, and the autonomy policy," Anton
said.

But Seung-Moon Kim, vice president of LG International
Corporation, said that he strongly believed many new South Korean
business groups would invest in Indonesia once the economic
situation improved because Indonesia is still home to skilled
laborers and has already adopted an open-economic system.

"Labor disputes are very natural in any country and all over
the world in line with significant changes in politics," Kim told
The Jakarta Post separately on Tuesday.

Suryo Bambang Sulisto, chairman of the department dealing with
the promotion of trade, tourism and investment at the Indonesian
Chamber of Commerce and Trade (Kadin), told the business meeting
that the biggest difficulty for Indonesia is to woo foreign
investors and "to ensure counterparts that Indonesia is safe to
visit and invest in" despite the sensational reports of many
foreign-based news networks.