Tim Dodd, Jakarta – The chairman of Indonesia's National Business Development Council, Mr Sofyan Wanandi, has the task of harnessing business to invest in Indonesia, but concedes that conditions are not yet ideal.

"Most of the investors have adopted a wait and see attitude. That is why we cannot bring them back before we get our house in order first," Mr Wanandi said yesterday.

Mr Wanandi, a Chinese-Indonesian businessman who is personally very close to President Abdurrahman Wahid, is trying to persuade local business people to reinvest their capital and foreigners to bring new investment. "That means political stability, security and law enforcement and labour situations have to be solved too. That's the only way to bring the investment back," he said.

Mr Wanandi's council has a target of creating a million jobs in the coming year, a fleabite in a country with an estimated 38 million unemployed and is focusing on the growth potential of small and medium enterprises.

In the retail sector, growth is already evident as pent-up demand created during the economic crisis is released. Markets in Jakarta are now crowded and busy and, at the higher end of the scale, there is a three-month wait for Indonesia's most popular locally made family vehicle, the Kijang. Car sales in January were four times higher than the same month last year.

But about 170,000 failed small and medium businesses are in the hands of the Indonesian Bank Reconstruction Agency and Mr Wanandi is pressing the agency to speed its handling of these cases. If these businesses can be sold and recapitalised quickly, it will have an immediate impact on employment.

The council is also looking to set up a new mechanism to deal with labour disputes between workers and factory owners, which are likely to become more frequent as the economy recovers and wage demands, which went on hold during the economic crisis, resurface.

Mr Wanandi said the council wanted to see a committee established representing business, the Government and unions which would mediate in labour disputes. "There must be an understanding that before they go on strike that there will be a team to talk to them ... or we will negotiate with the company in charge about how big an increase can be made." He said he hoped agreement on the new system would be reached this month.