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.