RI joins APEC meeting to shore up confidence

RI joins APEC meeting to shore up confidence

The Jakarta Post, Jakarta

President Megawati Soekarnoputri has left for the Asia Pacific
Economic Cooperation (APEC) summit in Mexico, where she is to
confront international skepticism on the Indonesia economy since
the Oct. 12 terrorist strike in Bali.

The government hopes to counter doubts with an explanation on
its handling of the Bali bombing, according to Coordinating
Minister for the Economy Dorodjatun Kuntjoro-Jakti.

"The government hopes to gain international support and
assistance for policies and actions that have been undertaken in
the aftermath of the tragedy," Dorodjatun said in a statement on
Monday.

He did not say what President Megawati planned to say to
convince countries to keep Indonesia on their investment radars.

Poor security has long been a problem in Indonesia but the
bomb explosion on Oct. 12 has deepened concerns with terrorists
now seen as operating in this country.

At least one international insurance committee has increased
the risk premium for ships bound to or leaving Indonesian ports,
while economists warned security jitters would stall investment
spending.

The APEC annual meeting in Los Cabos also comes amid worries
of a possible war against Iraq and the Bali bombing renewing fear
of terrorism.

Indeed, analysts have said the focus of the meeting would
likely deviate from APEC's main goal of freeing trade barriers
around the Asia Pacific region to discussing terrorism.

Noting the economic havoc terrorist strikes could wield, they
said, the U.S. would possibly use the APEC meeting to garner more
support for its global antiterror campaign.

Against this backdrop, Indonesia might come under new pressure
to crack down on suspected terrorists here in view of the fact
that the government had long been downplaying the terror threat.

The massive bomb explosion that killed nearly 200 people in
Bali, however, marks a turning point for Indonesia. So far the
government's response to the tragedy has drawn positive comments
from other countries even though its moves risk a backlash at
home.

The government has issued two antiterrorist decrees to clamp
down on suspected terrorists while waiting for an antiterror law
to be drafted.

Last week's arrest of Abu Bakar Ba'asyir won praise from
Singapore. Ba'asyir is said to have founded Jemaah Islamiyah
(JI), an organization banned in Singapore and Malaysia but
against which Indonesia has done little until now.

Economists said the government must act against such threats
if it wanted business confidence to return.

"It depends on how the government reacts after Bali," said
economist Marie Pangestu of the Centre for International and
Strategic Studies (CSIS).

She warned that domestic consumption, the backbone of
Indonesia's economic growth, was faltering and that the country
needed to offset the weakening consumption with more investment
and exports.

"Consumption growth is slowing, we can't expect much from
investment, and while we still have export, it can be affected if
security is weak," she said.

Prior to leaving for Mexico, Dorodjatun said in Bali the
government might allocate about Rp 9 trillion (about US$978
million) in unused loans for small and medium size enterprises to
help Bali's recovery.

"We still have Rp 9 trillion and we only have two months,
November and December, to go. Of course we can use the money to
help tourism in Bali to recover," he said in a meeting in Bali
with the representatives of the country's tourism sector.