Prerequisites for investment

Prerequisites for investment

U.S. Finance Secretary Lawrence Summers has suggested that the (Indonesian) government give priority to the establishment of this country's macroeconomic stability. This is an expansive concept because it covers not only matters of a purely economic nature, but it also seeks to help prevent seeds of unrest from developing through economic measures.

Foreign investment is highly needed because it is expected to help our economic recovery. The government, however, has doubts about the origins of the capital involved. The funds, after all, could be part of the money owned by conglomerates that flowed out of the country some time ago. The point is, it would be highly ironical if those funds should be used to buy out companies sold by the Indonesian Bank Restructuring Agency (IBRA), given their owners' still outstanding bad debts to Indonesian private and state banks.

Aside from such considerations, however, good facilities, security and a conducive environment for businesses to operate in are prerequisites for attracting foreign investment. These are the conditions that must be established. Therefore, the determination of the authorities to act firmly in this respect are appropriate.

-- Bisnis Indonesia, Jakarta