Minister says riots will not stifle growth

Minister says riots will not stifle growth

SINGAPORE (AFP): An Indonesian minister told leading U.S. and Singaporean business leaders yesterday that Indonesian economic reforms and growth would not be stifled by recent riots in Jakarta.

Coordinating minister for production and distribution Hartarto reportedly told the closed-door meeting of the U.S.-Singapore Business Council that Indonesia's economy would expand in 1996 at around 7 percent as targeted.

"Hartarto highlighted the fact that these disturbances have so far been limited only to Jakarta. Of course, they should not, in his view, disturb to any significant extent the economic progress of Indonesia," Singapore's deputy premier Tony Tan told a news conference.

Tan, who is council chairman, said Hartarto was confident Indonesia's economic growth target for this year would be met and that further liberalization of the economy should continue.

Over the last five years, Indonesia's annual gross domestic product (GDP) growth had exceeded 7 percent.

The Indonesian economy had lured more than US$100 billion worth of accumulated pledged foreign investment, of which $40 billion was registered in 1995 alone, according to published reports.

Two weeks ago, Indonesia's financial markets were jolted and investor confidence shaken by riots that swept through Jakarta after a military-backed raid on the headquarters of the opposition Indonesian Democracy Party (PDI), occupied until then by supporters of ousted PDI leader Megawati Soekarnoputri.

Three people died in the violence and at least 20 people were injured in the worst civil unrest seen in Jakarta for more than 20 years.

A poll commissioned by Asia Business News (ABN) and the Far Eastern Economic Review showed earlier this week that 43.3 percent of 300 top executives interviewed from 10 economies in Asia were reconsidering investing in Indonesia.

The high-powered U.S.-Singapore Business council, which ended its three-day meeting yesterday, had invited Hartarto to brief the business leaders on Indonesia's economic strategies and opportunities for U.S.-ASEAN collaboration.

Speaking on behalf of the U.S. members of the council, Lucio Noto, chairman of Mobil Corp., told reporters that minister Hartarto was "frank and open" in his comments.

"I think the Indonesian government is very sensitive to what is going on," he said.

"We (Mobil) has been there for 30 years, we have been through some very tough times and we wish them well in their efforts to continue to bring the country forward and try to get the maximum support of its people to what is going on," Noto said.

Singapore Airlines Ltd. chief executive officer Cheong Choong Kong said the U.S. and Singaporean business leaders accepted Hartarto's explanation "that the events notwithstanding, they will continue to make the progress that is projected."

Malaysia's international trade and industry minister Rafidah Aziz also spoke behind closed doors on business opportunities between the United States and ASEAN beyond 2000, officials said.

Apart from Indonesia, Malaysia and Singapore, ASEAN comprises Brunei, the Philippines, Thailand and Vietnam.

Among the objectives of the U.S.-Singapore Business Council is to promote and facilitate cooperation between private sectors in third country markets.

Singapore officials said the city state, with its extensive network of business and government linkages in Asia, could facilitate investments by U.S. companies in the region.