Tony Sitathan – The recent bomb blasts in Bali have created what some experts describe as a "terrorism risk premium" not just to Indonesia but to all of Southeast Asia. Many economists warn of capital flight and low foreign investment. And in fact, immediately after the October 12 bomb blast, most of the Asian basket of currencies dropped by as much as 2-3 percent while the stock markets took a bad mauling.

"The Jakarta Stock Exchange index and most blue-chip counters slipped by almost 35 percent. That sent shock waves throughout the financial and business community in Indonesia almost overnight," said Iwan Yoniton, of Bahana Securities a state-owned securities company.

Although this sent panic down the spines of local businesses and foreign companies in Indonesia, many felt that the after-effect of the Bali bombing was overrated.

"We thought there would be panic selling in the Jakarta bourse and also most businesses would come to a standstill, but nothing of that kind happened. Its seems like it's business as usual in Jakarta," said Freddy Irawan, an electronics importer based near the Chinatown district of the Indonesian capital.

Thanks to the government of President Megawati Sukarnoputri, the Bank of Indonesia, the central bank, intervened to prop up the sliding rupiah. "However, it's not sure how long this can be done, since more than US$20 million has been dumped in a single day by the central bank continuously within the first week of the Bali carnage," said Iwan.

The crackdown on terrorism by the Megawati administration, the promise of closer cooperation with other Association of Southeast Asian Nations governments, and the swift arrest of the head of an Islamic fundamentalist group in Indonesia helped to prevent a heavy economic fallout in the economy that has been chugging along slowly since early this year.

More has to be done to reassure local industry as well as foreign investors who have been warned against even making trips to Indonesia and other Asian countries, including Singapore. "With the growing trend of globalization among nations, it's inadvertent that if one national economy shows signs of slowing down or is badly affected, it could negatively influence the rest of region, and what happened in Indonesia does have a direct impact on the rest of the Asian economies, with the exception of India and China, that have a large enough base to be self-sufficient," said Agus Widjaja, a professor of economics at Pancasila University and a principal consultant for a state-owned mining company based in Kalimantan.

The battering of Indonesia may not be over yet. According to several reports by the army's intelligence wing, major cities such as Jakarta, Bandung, Semarang, Surabaya and Medan have been classified as Code Blue, where security forces are on a high state of alert to prevent another major catastrophe like the one in Bali.

Instead of pointing the finger and accusing foreign powers, the Indonesian government or the military for the Bali mishap, something more concrete has to be done, says Mickey Effendi, a businessman trading in seafood produce in Indonesia. "The politicians and those in the military seem to be engaged in a virtual power struggle in Indonesia. It's about time something of national interest [is] done to exonerate the image of Indonesia to its neighbors and to the outside world," he said.

A realistic anti-terrorism purge is meant to safeguard the national interests and solidarity of Indonesia. More effective policing and cooperation among anti-terrorism task forces of neighboring countries has to be in place. Nipping terrorist practices in the bud would improve the image of Indonesia. Security and political stability is considered one of the prerequisites for foreign investments, and a nation without it cannot hope to achieve much.

"Already the arcane policing laws and differing political ideologies are causing havoc in the minds of the investor. What is needed is a tough stand on terrorism before the next conclusive decision [is] taken to ally the fears of foreign investors," said Agus Widjaja.

The fear of economic terrorism that serves to hijack the interests of the business community has to be addressed squarely. Certainty and continuity of stable economic policies are necessary for progress. Yet the general rank and file of the business population in Indonesia is more concerned with daily issues rather than issues that concern national interests.

Abdullah Hade is a wholesale supplier who sells vegetables to vendors in the Cinere night market in Jakarta. To him what matters most is the ability to sell his vegetables on time. Even a single day's delay would affect his turnover. "What I need most is good roads in place and a sensible trucking system, not something grandiose," he said.

To Goenawan Sejarir, what is needed most is less interference from the authorities. "I run a bakery in the heart of Glodok in downtown Chinatown. What is most depressing is the shakedown and the payments one has to pay the authorities and the police, so that my business can run smoothly without any interference," he said. He wants greater transparency among government bodies and an end to corruption.

While the business community in major metropolitan cities is aware of the larger threats to security and political stability, what is more important sometimes are such daily issues as having sufficient electricity, housing, and water, and eliminating corruption and improving infrastructure development.

If Indonesia can address these smaller but essential issues, then perhaps it can also try to include the larger issues on its wish list. "There has to be a concerted effort by the government to be able to address these fundamental issues and hence create a sense of belonging to the general population and by giving them a stake in Indonesia. That would be the ultimate challenge for Indonesia and Indonesians, especially in these times of uncertainty," said Agus Widjaja.