...[I]t is important that the government should manage the standoff between followers of the Ahmadiyah sect and locals in West Java before it escalates into a larger problem.
Source & Credit: The Jakarta Globe
Editorial: July 29, 2010
Foreign direct investment may not be gushing into Indonesia but they are certainly picking up.
Gita Wirjawan, head of the Investment Coordinating Board (BKPM), has said FDI was expected to reach Rp 118.4 trillion ($13.1 billion) in 2010, an increase of 25 percent over last year’s $10.5 billion.
The government had expected FDI to rise only 15 percent. With only half the year gone, the signs look promising.
Surging consumption, competitive labor costs and confidence in Indonesia’s political stability are attracting foreign investments, particularly from Asian and Middle Eastern electronics, infrastructure and energy firms.
This week, US heavy equipment maker Caterpillar said it may pick Indonesia as its Southeast Asia manufacturing base. South Korea’s LG Electronics is also considering such a move, as Jakarta takes on regional rivals Vietnam and Thailand.
Electronics manufacturers such LG, in particular, are especially interested in the nation’s growing consumer spending.
The company now controls 40 percent of the domestic market. Its growth is so staggering that it is now contemplating making Indonesia its Southeast Asian hub.
It has taken more than a decade for the country to win back investor confidence so it is critical that we do not jeopardize it, just when the trend is picking up.
Foreign direct investors, unlike portfolio investors, do not make short-term decisions. Their newfound confidence is a result of years of slow and steady progress in the country.
Underpinning the nation’s economic and consumption growth are social and political stability. Free and fair elections, coupled with efforts to end social and armed conflicts, are now bearing fruit.
Against this backdrop, it is important that the government should manage the standoff between followers of the Ahmadiyah sect and locals in West Java before it escalates into a larger problem.
Religious Affairs Minister Suryadharma Ali has said the West Java tension, which entered its fourth day on Wednesday, is essentially a political problem. His ministry is now working with the National Police to defuse the situation.
Nothing frightens investors more than potential social instability, because even a minor fracas can easily escalate into an all-out conflict, especially if it involves a religious or ethnic dispute.
Religious discrimination is a violation of the Constitution and every citizen has a right to practice his or her own religion.
The state and security apparatus must protect minority groups against discrimination and violence by the majority. The Ahmadiyah should be allowed to worship in peace as long as its members do not seek to influence outsiders.
Religious tolerance is at the heart of Indonesia’s social fabric. It enables all to co-exist peacefully and it is one of the driving forces behind the renewed attractiveness of the country to foreign direct investors.
It would be a tragedy if we undo years of hard work by allowing a local conflict to get out of hand.
Read original post here: Editorial: Local Conflicts Put Investment at Risk
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