Anissa S. Febrina, The Jakarta Post, Jakarta
Prospective investors may opt for more business-friendly countries if the government fails to contain widespread unrest in mining areas, foreign business associations say.
""Companies who were previously attracted here could move to more friendly countries like India, China or Vietnam if cases like this continue,"" United States-Indonesia Society (Usindo) co-chairman Ed Masters said Thursday.
Masters, speaking at a press conference on bilateral business relations, said that there would be no gains for people trying to exploit the situation except in making Indonesia less competitive.
In recent weeks, a series of protests has targeted foreign companies ExxonMobil Corp., Newmont Mining Corp. and Freeport-McMoRan Copper & Gold Inc, with those against the latter two escalating into violence and causing five deaths.
Business groups from European countries also warned that unrest was bad for business.
""It does not create a picture which is attractive to foreign investors,"" British Chamber of Commerce in Indonesia chairman John B. Arnold said.
""It is hard to find it as a positive sign for the Indonesian business climate.""
Indonesian-French Chamber of Commerce and Industry chairman Allain-Pierre Mignon said many investors had suspended plans to invest in Indonesia following the recent wave of protests.
However, he added that it did not represent the whole economic picture for the country because the protests were localized.
The president of the American Chamber of Commerce in Indonesia, James Castle, said natural resource investment often attracted controversy around the world, either due to environmental issues or because of the unfair distribution of mining benefits to the locals.
He said the current unrest might bring a long-term positive impact, with the government and mining companies taking steps to avoid a repeat of the incidents.
""Everyone should learn their lessons this time. Companies always have to look for ways they can do things better and be better corporate citizens, while governments also have to be more transparent with locals on profit sharing,"" he said.
Indonesian Chamber of Commerce and Industry (Kadin) committee head for the U.S., Sofjan Wanandi, said Indonesia would have to explain current problems during its visit for a first round of discussions on economic agreements with three American cities next month.
""We will also talk about current problems in trade of commodities and study the possibility of a free trade area,"" Sofjan said.
A U.S. trade and investment delegation also will pay a visit to Jakarta in August to explore possibilities of air cargo links with Batam, as well as other investment opportunities.
The U.S. is Indonesia's second largest business partner, with exports to the country amounting to US$9.46 billion, accounting for 14.46 percent of total 2005 exports.
Imports of goods from the country were $3.8 billion, or some 9.45 percent of total imports in 2005.
