Jakarta – Israel has quietly invested 200 million dollars in Indonesia, the world's largest Muslim-populated nation, via foreign companies, Indonesian President Abdurrahman Wahid has said.
"Israel does not extend the capital directly but through a third party, a Dutch or US company," he told members of his newly inaugurated National Economic Council Saturday.
But according to the overnight report from the official Antara news agency he did not say which sectors the Jewish state had invested in.
Indonesia and Israel do not have official diplomatic ties, but Wahid, a respected Muslim cleric, said shortly after being elected in October that he wished to open trade relations with the Jewish state.
His proposals were widely criticized at home, especially by the Muslim lobby, with massive street demonstrations last month in the capital and other main Indonesian cities.
Indonesia has been a staunch supporter of the Palestinian cause and many protestors have said trade with Israel would constitute treachery.
Foreign Minister Alwi Shihab earlier defended the government's plan saying it would help improve Indonesia's image abroad and the economy.
Shihab told the Tempo weekly magazine in an interview last month that the real aim of the move was to influence the strong Jewish lobby in the United States.
"We have to be frank, the Jewish lobby in the American congress is very strong ... the US cabinet, is also dominated by the Jews," Shihab told Tempo.
"Israel has already expressed its wishes to invest in Indonesia in the field of agro-business and production but because there are no formal ties, this cannot yet take place," Shihab said. He had said that indirect Israeli investment in Indonesia amounted to 20 million dollars.
The new National Economic Council, headed by distinguished economist Emil Salim will advise Wahid on the country's economic development as it shakes off the Asian financial crisis which brought the economy to its knees in 1997.
[The "massive street demonstrations last month" refered to in this article involved around 100 protesters at best - James Balowski.]