Robert Go, Jakarta – Frustrated with the lack of recovery and stability at home, many Indonesian businessmen are scouting for opportunities and investing abroad just when the country needs all the capital it can get. They described other countries such as Thailand, Vietnam or Malaysia as better for investments.

The jumping-abroad trend could spark a nationalistic backlash, including racially charged reactions against the ethnic Chinese, who are believed to still control up to 90 per cent of Indonesia's economy. But some businessmen, including several non-Chinese, shrugged off these concerns and described their actions as "purely motivated by business".

Said an exporter of furniture and wood products: "This has nothing to do with nationalism or patriotism. If I don't put my money to work, I risk losing to my competitors." He has already started negotiations with Thai partners to start construction before the end of the year.

A textile-industry businessman added: "The socio-political problems are severe enough to overshadow the positive angles, including cheap labour, that is available here." Ironically, many of these businessmen began probing for opportunities abroad during meetings with foreigners who were invited to Jakarta by government officials anxious to drum up capital inflow to the country.

Mr Harun Hajadi, managing director of real-estate developer Ciputra, said domestic business sentiment went from good to bad during the past year. "Many domestic investors were quite ready to make additional investments in Indonesia last year, and foreign investors would have followed suit," he said. "After this year, however, no one thinks optimistically about Indonesia. It's understandable why some look outside for better opportunities."

Mr Zulian Siregar, who owns several garment factories and boutique outlets throughout the country, echoed the developer and said: "About one year ago, many people thought hard and creatively about how to make investments at home. They are getting more desperate, and are starting to look at Asean countries as options. Some have scaled down domestic operations to prepare."

The manufacturing and export sectors, including textiles, furniture, wood products, and chemicals, will be hurt the most if more businesses relocate abroad. "It doesn't matter where goods are made. Raw materials can be imported anywhere and as long as there is a good local work force, everything is set to go," said Mr Zulian.

Mr Harun, who is of Chinese descent, said: "All things being equal, Indonesians prefer to stay home. We know this market already and don't have to start from scratch. "But things are not looking so good these days."

He pointed out, however, that some businesses still invest at home, although with a slightly different strategy from the past. "We choose our investment targets more carefully and perhaps go to higher-growth areas outside of Java Island, like Pekanbaru or Medan in Sumatra, and Menado in Sulawesi," he said.