Robert Go, Jakarta – Indonesia could experience more security problems and political instability ahead of its first direct presidential election on July 5, a top Cabinet minister said yesterday.

Businessmen, however, maintained an upbeat perspective and said the trouble brewing in spots faraway from Jakarta would not dampen investors' interest here just yet.

Home Affairs Minister Hari Sabarno, who is doubling up as the country's top security minister, told reporters: "We are seeing symptoms that could disrupt political stability and security before the presidential election." At least two major incidents have caused some concerns.

First, there is the recurrence of violence in the religiously divided Ambon in Maluku province. And on Tuesday, two people were killed in the aftermath of a blast in Pekanbaru, Riau province.

Police are flagging that incident as possibly linked to other bombing attacks in the country in recent years.

They have also been seizing more weapons and bomb material in conflict-prone regions such as Poso in Central Sulawesi province.

Mr Hari addressed the possibility that provocateurs were to blame for the recent troubles. "We had peace and quiet before the legislative elections in April," he said. "But once those elections were over, we are seeing potential trouble. This is strange." There is more than politics at stake here.

Investors have been paying close attention to stability and security issues in the business environment in recent years.

The Jakarta stock market has dipped from the historic high point of 818.15 that it reached on April 27 and closed at 743.64, a drop that some market players attributed to growing security concerns.

But other businessmen said the outlook for Indonesia remains positive, with people banking on the idea that a strong leader will emerge out of the presidential election rounds.

Mr Daniel Budiman of Mahanusa Capital acknowledged that security was a concern. But the market's drop has been fuelled by external factors such as China's plans to scale down investment spending and the United States Federal Reserve's increase in interest rates, he said.

Mr Patrick Alexander of Batavia Investments agreed, saying there is far more interest in Indonesia now among foreign investors compared to a few years ago, a trend that will continue.

"In general, we don't see that these incidents are upsetting businessmen who are currently operating here. People watch security issues closely, but right now there isn't yet a fear of big trouble," Mr Alexander said.