RI's recovery 'depends on international confidence'

JAKARTA (JP): The recovery of Indonesia's crisis-hit economy will depend on the return of international confidence in the country, businessmen said yesterday.

"The most important thing at present is how to win back foreign investors' confidence," said James T. Riady, the vice chairman of the Lippo Group.

He said that the current economic crisis had sent many businesses bust and had also created a worrying level of unemployment.

James said foreign investors could help in recapitalizing the country's cash-strapped business sector which in turn would revive the overall economy.

He said that without the help of foreign investors it would be difficult to prevent a further slide in the country's battered economy.

He was speaking following a ceremony on the introduction of Indonesian special business ambassadors in which James was appointed special envoy to China, Taiwan, Hong Kong, Australia and New Zealand.

"Our duty is to remind them (foreign investors) that a 1 to 2 year setback in the long term should not be much of a problem," said James, who was also recently appointed a member of the People's Consultative Assembly by President B.J. Habibie.

He explained that since Indonesia has the world's fourth largest population and abundant natural resources, it had the potential to be the first to recover from the crisis, which has hit most of Asia.

"The natural resources have universal value, and it surpasses the value of the rupiah because it is valued in dollars," he said.

He acknowledged that over the next two years the situation might worsen, but large economies like China, Taiwan, Hong Kong and Australia should think 50 years ahead and not just short term, like one or two years.

"Indonesia is a large country with an important role in the Asian region, and any company which intends to be active in Asia should make Indonesia its destination," he said.

He explained that Indonesia was embarking on a process to transform its economy into a global and market-oriented economy.

He expected all parties to realize that globalization and market-oriented transformation was inevitable.

He added that despite the sweeping economic reform programs sponsored by the IMF, there was still room for the government to continue deregulating.

He pointed out that businesspeople and tourists from China found it difficult to enter Indonesia because it took three to four months for them to be issued an entry visa.

"If we could make this time shorter, at least 200,000 tourists from China could be expected to come to this country," he said, pointing out that some 300,000 Chinese travelers visited Malaysia annually.

Indonesian Chamber of Commerce and Industry chairman Aburizal Bakrie, who introduced the envoys to the media yesterday, said the envoys had a tough mission: to persuade foreign investors to return to the country.

Many foreign investors and local businesspeople of Chinese origin left Indonesia following the May bloody unrest which also led to the resignation of long-serving president Soeharto.

"Indonesia's economy is in a very difficult situation and can only be recovered with the return of international confidence," said Aburizal, who is also a member of the Indonesian Economic and Finance Resilience Council (DPKEKU), the country's crisis center.

During difficult times people tend to look at only what is visible, making investment decisions based on a short-term vision, he said.

Aburizal said the first priority to win back foreign investors' confidence was to create public order to make sure it was safe doing business in Indonesia.

The government must also quickly address the country's social problems resulting from the economic crisis, he said.

He added that solving the banking sector's and private sector's overseas debt problems were also key to persuading foreign investors to return to Indonesia with their money.

The six other businessmen appointed as special envoys are Hashim Djojohadikusumo to cover Europe, Suryo Sulisto for America, M. Sinivasan for Southern Asia and Africa, Iman Taufik for Southeast Asia, Kusumo for Japan and South Korea, and Mukrim Hakim for the Middle East.

The special envoys, who will be formally inaugurated by the President on July 7, will be given diplomatic passports for themselves and their wives.

Their travel and lobbying expenses, however, will not be covered by the state but by individual businesspeople.

"This is our contribution to help this country," Aburizal said, pointing out that the appointment of the businessmen was important to regain the confidence of foreign investors, who are businessmen too.

"They speak the same language," he said. (rei)