Protection of local banks necessary
In a poll of Asian executives conducted by The Far Eastern Economic Review (April 29, 1999), Indonesia was reported to be one of the countries which executives believed was an Asian economy which could not recover without an influx of foreign capital. This was according to 82.2 percent of poll respondents.
If the economic pundits come together to debate how to overcome the present economic crisis, I foresee an endless debate. There are economists who steadfastly believe that if only foreign investors can be attracted to invest their capital in this country, the crisis can be overcome. Jobs will be created, which infers that the unemployment problem will be solved; economic activity will start again; the export of nonoil commodities, which represent more than 50 percent of the country's foreign exchange earnings and is one of the most important factors to solve the economic crisis, will pick up.
Undoubtedly, on the other hand, there are economists who will express their opinion that if foreign capital starts flowing into Indonesia, we will one day wake up as employees, with expatriates as our bosses. Or, as the first Indonesian president so aptly described in one of his famous speeches: "We must not become a nation of coolies and a coolie among nations."
People who kept their foreign capital abroad during the 32 years of the New Order are naturally reluctant to bring back their hard earned foreign exchange, so long as social unrest prevails. So if we say that reform is of the utmost importance to build a prosperous country, the reform of the soul (the revival of patriotism) is no less important.
I recall the great depression in Uncle Sam's country in the 1930s, when many labor intensive projects were created, among others, the construction of the huge Boulder Dam which employed thousands of workers. Allow me to quote a few lines from The Far Eastern Economic Review dated March 18, 1999, in which a writer argues that foreign domination of local banks is a form of neocolonialism and it is imperative for Asian countries to try and protect their banks from foreign predators, as desperate as they may be for fresh funds.
A. DJUANA
Jakarta