S'pore investors wait for more signals from RI

S'pore investors wait for more signals from RI

By Endy M. Bayuni

SINGAPORE (JP): Although conditions in Indonesia have significantly improved and in spite of an endorsement by the Singapore government, many Singapore investors continue to wait for further guarantees of the safety of their investments.

Leading members of the Singapore Chamber of Commerce and Industry praised the new Indonesian government of President Abdurrahman Wahid for the steps it has taken to lure back foreign investors.

But ultimately, businesses are concerned about the safety of their investments, they told visiting Indonesian journalists.

"You've made progress, but there's still more to be done," chamber chairman Kwek Leng Joo said last week.

He predicted progress would be slow because of the nature of the coalition government in Indonesia.

"It will take some time for the government to become fully effective. Confidence will begin when you can show foreign investors that this government is here to stay and is able to initiate whatever is needed to give the right push," he said.

John Y. Lu, managing director of South Grand Textiles Pte Ltd., said the Singapore business community had a high regard for President Abdurrahman, which was comforting considering they had not heard of most of his Cabinet ministers.

"He's a very high-level politician. He has a lot of wisdom. He did a lot of behind-the-scenes arrangements but he provided results. In business, that's the way to solve problems.

"Our concern is his health, and whether he can bring the power struggle under control," he said.

Singapore companies have been hesitant to take part in the S$2.6 billion economic assistance package announced by Prime Minister Goh Chok Tong during his visit to Jakarta in January.

Goh's package includes an offer to participate in investment projects in Indonesia, a loan scheme for small and medium Singapore enterprises investing in Indonesia, a joint promotion effort on the tourism front and the development of Batam, Bintan and Karimun industrial islands in Indonesia.

But nearly two months since the announcement, the initiative, particularly the loan scheme, has received few takers, with Singapore businesspeople saying the political situation in Indonesia remained uncertain.

Kwek compared the situation in Indonesia with that in China. He said that although doing business in China could be time consuming, particularly negotiating contracts, and although problems might arise after a project had already begun, China continued to attract investors.

"Why? Because China has political stability. It is something very assuring to private businessmen like myself.

"All of us look forward to the return of political stability in Indonesia. We will continue to do what we can, to assist in every aspect as best as we can," he said.

Top government officials in Singapore said they had done all they could to encourage investment in Indonesia, but ultimately it was up to the investors.

"We've encouraged them. We've worked out the schemes," Deputy Prime Minister Lee Hsien Loong said.

"Whether the businessmen take them up or not, they have to make their own judgment.

"Our idea is we only participate as a minority shareholder in a scheme if the businessmen want to go. We give them confidence," he said.

Singapore Minister of Foreign Affairs and Law S. Jayakumar said some progress had been made, evidenced by discussion of the prime minister's economic package by Indonesian and Singapore officials.

"That's at the government level. At the private sector level, they (businesses) will have to make their own judgments. The private sector is a good barometer of how they see things. If they're still hesitant, we have to look at the causes," Jayakumar said.

Singapore is the third largest source of private direct investment for Indonesia, with an accumulated investment commitment of US$18 billion.

Kwek said many Singaporean and foreign investors were still interested in Indonesia for many different reasons.

"But seeing what has happened in the last two years, they tell themselves to wait and see more.

"Many are staying on the sidelines. Which is good. The worst scenario is if there's no one on the sidelines," Kwek said.

He said Singaporeans were not only concerned with the unrest in Ambon and Aceh, two major trouble spots in Indonesia, but also with a recent spat affecting an investment project owned by the Indonesian Salim Group on Bintan island.

"News of this nature affects confidence, especially among the Chinese investment community outside Indonesia," Kwek said.

The Salim Group, owned by Indonesian tycoon Liem Sioe Liong, more commonly know as Sudono Salim, has numerous joint ventures with Singapore, including companies on Batam, Bintan and Karimun. Some of the group's assets were handed over to the Indonesian Bank Restructuring Agency as compensation for unpaid loans.

In spite of the concerns, members of the Singapore Chamber of Commerce continue to explore the possibility of investing in Indonesia. This includes organizing delegations to meet with their counterparts in Indonesia.

Tay Beng Chuan, president of the Singapore Chinese Chamber of Commerce and Industry, proposed a smaller, more focused exchange of delegations in the future.

"Indonesia should take the initiative. The textile sector in Indonesia, for example, should invite specific industries in Singapore. I also urge Indonesian industrial groups to come and discuss matters with their Singaporean counterparts," Tay said.

Kwek said Indonesia should strive to attract one large multinational company to invest in the country, because that would have a substantial impact.

"If you can get one MNC (multinational corporation), the result will be more effective than 10 small and medium enterprises from this region," he said.