Christopher Torchia, Jakarta – Foreign investment will probably flow back into Indonesia's shattered economy if parliamentary elections on June 7 are conducted without any major disruption, former US President Jimmy Carter said Thursday.

Carter, who plans to act as an election observer, described the poll in Indonesia as the most significant in 1999.

The Southeast Asian nation of 210 million people and more than 13,000 islands has embarked on a transition to democracy and its political welfare is seen as crucial to stability in the region.

"As far as the size of your nation, its influence throughout this region, a successful election is perhaps the most important democratic decision in the world" this year, Carter said told a reporter at a news conference.

A host of international observers and institutions, including the Atlanta-based Carter Center, is expected to monitor what the government promises will be the fairest election since the 1950s.

During the authoritarian rule of President Suharto, who was ousted last year, elections were carefully controlled by the ruling Golkar party to ensure that it emerged the victor.

The parliamentary poll comes at an uncertain time in Indonesia, where civil unrest has broken out in a number of regions, leaving hundreds of people dead. The roots of the violence lie in economic hardship as well as ethnic, religious and political conflicts.

Carter, who met President B.J. Habibie, military chief Gen. Wiranto, election officials and student leaders on Thursday, said a smooth election would boost Indonesia's crisis-ridden economy by attracting investors who are awaiting political developments.

"I don't think there's any doubt that the results of the election will have a major impact on the economy," said Carter, who observed elections in Nigeria last month.

After leaving office in 1981, Carter and his wife, Rosalynn, formed The Carter Center, a nonpartisan, nonprofit organization created to promote peace and fight disease in neighborhoods and nations around the world.