Tue, 09 Nov 1999

Wooing capital back

There is obviously a need for Indonesia and Singapore to cooperate. Aside from the fact that for the smooth flow of trade we are to a considerable degree dependent on Singapore, there is the reality that many of our billionaires are keeping their money in Singapore.

Capital flight is one of the reasons why the rupiah has drastically fallen in value and our economy has been thrown into a devastating crisis. Now it is said that capital owners abroad are trying to persuade the government to give them special treatment, such as by giving them tax pardons, in return for their bringing back their money to Indonesia.

This obviously poses a dilemma for President Abdurrahman Wahid's administration. On the one hand, the money is needed to revive the Indonesian economy. On the other, granting tax pardons could invite negative reactions from people who demand fairness.

We therefore urge Abdurrahman to be careful in drafting his policies. We do support his diplomatic alacrity because it is needed. We do need breakthroughs to get us out of the isolation of the past couple of years. Internally, however, we also need to rebuild a strong spirit of national solidarity.

-- Bisnis Indonesia, Jakarta