Black May 1998: 4th Commemoration (6 of 17)

Chinese community ready to reinvest in country
By Robert Go
Analysis
The Straits Times, Singapore (March 9, 2002)

Jakarta - Nearly four years after May 1998's deadly riots in Jakarta, leaders of the minority Chinese community here say it is time to bring back money parked outside the country and reinvest in Indonesia's economy.

They may have many complaints about how the government manages parts of the economy, but recent policy decisions, including those initiated by former president Abdurrahman Wahid and others now implemented by the Megawati administration, are seen as assurances of the government's commitment to protect ethnic-Chinese interests.

Said Mr Anton Supit, chairman of the Indonesian Footwear Association: 'I guarantee many Chinese will bring back their money and reinvest here if they feel secure. We all know Indonesia still has big potential.

'Now is the right time. The government realises it needs the support of the entire nation, so it has adopted policies that are more supportive of the rights of the Chinese.'

Leading businessman Sofyan Wanandi of the Gemala Group agrees: 'We have started to look at business opportunities again. President Megawati has a lot of support from the Chinese community, because of her track record and her commitment to us.'

Businessmen here estimate that as much as US$20 billion (S$36 billion) was taken out of Indonesia in the aftermath of the May 1998 riots, when mobs destroyed parts of Jakarta's Chinatown and drove thousands of ethnic Chinese out of the capital.

That money, they say, has since been parked in banks abroad or invested in countries such as Thailand and Vietnam.

Indonesia's economy, in the meantime, has continued to stumble. Net investment last year, according to Bank Indonesia, was minus US$4.1 billion, reflecting a pullback by foreign investors.

But for this year, analysts predict growth of around 6 per cent on the investment front. Much of this will be fuelled by domestic businesses.

Said Mr Suryo Sulisto, head of the Indonesian Indigenous Businessmen Association: 'The absence of the huge Chinese conglomerates means there's a chance for smaller companies, owned by both Chinese and indigenous businessmen, to grow.

'This shift from bigger to smaller companies will become clear this year.'

Mr Sofyan observed: 'For foreign investors, it's still the same concerns about stability and security. But they may take the return of Chinese money as an indication Indonesia is finally safe enough.

'The government, therefore, should concentrate on the other risk factors and show reform progress in the judiciary, law enforcement, investment laws and so on.'