Tue, Oct 15, 2002 page10

• Indonesia braces for aftershock

  ECONOMY Officials are looking for ways to keep investors from vacating markets following a blast in a resort that killed and hurt tourists on Saturday

  • AFP AND DPA
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  Indonesia's economy minister urged analysts and the media yesterday to refrain from "exaggerating" the impact of the Bali bombing, saying this would only scare away potential investors.

  "Our economy, which has started to recover, should not necessarily suffer a setback due to a [security threat] perception and fear. Our economy should be able to survive the impact," Dorodjatun Kuntjoro-Jakti said in a statement.

  

  The trading floor of the Jakarta stock exchange shown yesterday. Share prices closed the morning sharply lower, with the benchmark index hitting an 18-month low, as investors panicked and sold down blue chips and other stocks in the wake of the bomb blasts in Bali over the weekend. The composite index closed the morning down 34.344 points, or 9.12 percent, at 342.122.

  PHOTO: AFP

  The statement was issued before a planned meeting at which Kuntjoro-Jakti will brief businessmen on the government's response to the bombing.

  "I hope that analysts, experts and the media do not scare away investors with exaggerating comments," he said.

  "The evaluation on the spot shows production and distribution activities in general are not affected by the terror in Bali," he said.

  The minister also said the tourism sector has not yet been "substantially affected" by the incident.

  The government would try to persuade events organisers who have planned business gatherings or seminars in Bali not to cancel.

  "We will meet them and assure them that we will guarantee security in Bali," he said.

  "I am certain that the national police and the military will move swiftly and decisively in bringing the perpetrators of this outrage to justice," he said.

  "Our hearts go to the families of the victims and the survivors. This incident starkly demonstrates the need for increased vigilance on the part of the authorities and the Indonesian people in order that incidents such as this never occur again.

  "The government of Indonesia will also continue to work together with the international community to overcome terrorism, which is also a threat to global security," he said.

  Nevertheless, the blast that ripped through a crowded nightclub in Indonesia's resort island of Bali will likely hurt business and consumer sentiment in Singapore and the Southeast Asian region, analysts said yesterday.

  The attack has injected another dose of uncertainty into markets and has put downward pressure on already slowing economic activity in the city-state, they noted.

  "Obviously this extension of violence to Bali is not a good sign at all, so we have to watch how this plays out," said Singapore's Senior Minister for Trade and Industry Tharmin Shanmugaratnam.

  "I hope that it can be checked in time -- it is not good for the whole region, obviously," he said.

  "The immediate impact would be a further weakening of consumer confidence," said Professor Philip Poh of the Singapore Institute of Purchasing and Materials Management.

  Service industry

  The institute surveys more than 200 businesses every month and compiles an index regarded as a key indicator of manufacturing activity.

  The service industry will bear the brunt of the loss in consumer confidence, Poh told the Straits Times, and weaker business sentiment will result in a cloudier economic outlook.

  "I expect that there will be more incidences of order cancellation" after the Bali blast, he said.

  "All these uncertainties are giving Singapore, as well as the region, severe challenges in managing the economy," Poh said.

  Tan Kee-wee, director of research at the Singapore Confederation of Industry, said general sentiment will be hit in the short term as people stop buying and adopt a wait-and-see attitude.

  Travel agents said they expect a spate of cancellations of Bali over the next few weeks.

  "It's very bad timing because the number of visitors to Bali was just returning to normal after the spate of unrest in the late 1990s," said David Teo, managing director of Fascinating Holidays.
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