Jakarta – Indonesia's plans to win back foreign investment for its troubled economy could falter as the United States and other governments fear for the safety of their diplomats and citizens in the world's most populous Muslim country, analysts said Friday.
"Unless Indonesia is able to quickly reassure the US government and foreign businesses that it is safe here, the economy is going to be hit very hard," said Raden Pardede, an economist at the state-owned Danareksa Research Institute.
The US authorities and other Western governments are worried about rising anti-US sentiment and the activities of some fringe Muslim groups after Washington vowed to strike back at Osama bin Laden, the alleged mastermind of terror attacks on the World Trade Center and the Pentagon.
The US State Department has warned Americans not to travel to Indonesia, saying "extremist elements may be planning to target US interests." It also authorized all nonessential personnel at the embassy in Jakarta to return to the United States with their families. Dozens are expected to leave this weekend. Other embassies also have warned their citizens to take care in Indonesia.
The heightened fears come amid threats by extremist Islamic groups to round up and attack Americans, despite safety assurances from the Indonesian government, which has said it supports Washington's war on terrorism. There have been near-daily anti-US demonstrations in several Indonesian cities. US-owned businesses have said that they are closely monitoring the security situation in Indonesia and may evacuate foreign nationals if it deteriorates.
Earlier this week, the Indonesia president, Megawati Sukarnoputri, was in the United States trying to restore investor confidence in her country. She encouraged businesses to return to Indonesia, promising to improve the security situation. "Indonesia is open for business," she said.
Analysts, however, say that despite the promises, Jakarta has failed to take action to protect foreigners. "As of today, there's been no action, just lip service," said Ken Conboy, an analyst with Control Risks Group, a London-based security consultancy. "Indonesia's economy will be hit very hard if there's a mandatory evacuation of the US Embassy." "Not only US investors will be scared off," he said, "but businessmen from other countries and even local investors will look elsewhere to invest."