Protection of local banks necessary

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