Duncan Graham, who runs the Indonesia Now blog, writes:
People who spruik opportunities to make money have got to be suspect. If they believe what they say, why broadcast the potential and crowd the market? Better use their own cash and reap the benefits – unless they know something else but are not letting on.
Ramping investment in Indonesia is the current favourite, with politicians from PM Tony Abbott down, plus a chorus of economists and commentators. The backing track hums that Australian businessfolk are too lax and Asia-shy to see the obvious.
But maybe they’ve done their research on issues like Nat Rothschild’s dealings with PT Bumi Resources (linked to presidential aspirant Aburizal Bakrie) and companies like Intrepid Mines’ Tujuh Bukit mine, and seen chancers burned beyond recognition. Perhaps Australian investors do know about Indonesia’s natural resources and growth rate, but have weighed them against the problems. These include surging economic nationalism, no clear rule of law, corruption, appalling infrastructure, an uncertain political climate and an incompetent bureaucracy.
All the positive things Mr Abbott said about Indonesia are true. So are the negatives. If the next president can address these then Indonesia will be a splendid place to develop lasting and worthwhile ventures.
Till then it remains a market of great risks and daunting difficulties.