PwC sees successful reforms in Indonesia

PwC sees successful reforms in Indonesia

SINGAPORE (Dow Jones): Indonesia will make a successful
transition to democracy and a stable market economy, but its ride
will be bumpy, an executive of PricewaterhouseCoopers predicted
Monday.

"Indonesia has a bright future down a long, bumpy road," said
Ian Paroissien, country senior partner in Jakarta, at a seminar
in Singapore.

Despite economic troubles, widespread corruption and
separatist movements in some regions, "I think there is a sense
of optimism in Indonesia," said Paroissien. "I think there is a
belief in the future."

Elections this year produced a leadership under President
Abdurrahman Wahid that is committed to building democracy,
preserving national unity and putting Indonesia on a sound
economic footing, Paroissien said.

Rising prices for oil and other commodities should help
economic recovery in the far-flung, resource-rich country, which
saw its economy contract by nearly 14 percent in 1998 as Asia
suffered its worse financial crisis in decades.

In addition, the International Monetary Fund, World Bank and
other international financial institutions have made aid to
Indonesia, the world's fourth-largest country, a high priority,
he said.

Some analysts have said that Indonesia, which lost the
province of East Timor this year after a bloody struggle, is
threatened by secessionist movements in Aceh and other provinces.

However, Paroissien said it was unlikely that Indonesia will
fall apart. Unlike East Timor, which Indonesia occupied after the
Portuguese withdrawal in the 1970s, provinces like Aceh have
always been a part of Indonesia, he said.

He predicted "a positive political solution" to calls for
independence in Aceh and other provinces. The solution will
involve some devolution of political authority and greater
sharing of government revenue.