Transparency 'essential' to restore confidence

Transparency 'essential' to restore confidence

JAKARTA (JP): Greater transparency and political will,
especially in nominating vice presidential candidates, are
essential to restore confidence in the Indonesian economy,
chairman of Gemala Group Sofjan Wanandi said yesterday.

After a seminar on Indonesian export prospects in the regional
free trade era, Sofjan said the issue of political leadership --
and the smooth transition from one leader to another -- as well
as a more open political system -- needed to be addressed in
order to restore international confidence.

"For foreign investors, political transparency is more
important now than the government's economic policy," he said.

He urged the ruling Golkar to announce its candidate for vice
president as soon as possible because the world is waiting to
hear who it is.

Sofjan, who was part of a business mission to the United
States led by Finance Minister Mar'ie Muhammad last week, said
businesspeople overseas asked many questions about the issue of
national leadership succession.

He said most foreign businesspeople asked about the country's
monopoly and national car policies and about the leadership
transition.

"The government needs to provide clear signals and greater
transparency, because inconsistencies and mixed signals affect
investor confidence in the short-term and more importantly cloud
the medium-term outlook of the country's prospects," he said.

Sofjan also said that foreign creditors' confidence in
Indonesian companies was on the wane.

He said some foreign creditors had asked private companies to
repay debts prior to the maturity date because of their complete
lack of confidence in Indonesia.

"If the government cannot restore public confidence in the
coming year, I am afraid that most major Indonesian companies
will collapse," he said.

He said most major local companies would not survive a
continuing fall in the rupiah's value as well as high interest
rates.

"But if the adjustment policies are undertaken successfully
and the government and businesses use this opportunity to make
the necessary self-corrections and recognize that they will be
operating in a different environment, I'm confident that in the
medium-term the prospects will be bright," he said. (gis)