From Business Times http://business-times.asia1.com.sg/sub/news/story/0,4574,189180,00.html?
Published March 16, 2006
"Fix things" and US business will invest again: Rice
By SHOEB KAGDA IN JAKARTA
US Secretary of State Condoleezza Rice yesterday said that American businesses will invest in Indonesia again if the country continues to improve the rule of law and strengthen its democratic institutions.
Dr Rice: 'We want to have investments come here - but we do have security concerns'
She noted that while the US government will continue its efforts to convince American businesses to invest in Indonesia, improving the country's investment climate is critical.
'I am a firm believer that when Indonesia recovers and strengthens its democracy, it will be a big place for US investments,' Dr Rice said. 'We want to be open and have investments come here, and we will work through our Commerce Department to bring more investments here but we do have security concerns.'
In her address to the Indonesian World Affairs Council, she also urged Jakarta to make greater efforts to reform the country's armed forces, echoing calls from critics of Washington's decision to restore military ties last year.
Dr Rice stressed that a 'reformed and effective' Indonesian military was in the interests of everyone in the region. 'We look for continued progress towards greater accountability and complete reform,' she said in prepared remarks at the end of a two-day visit to the world's most populous Muslim nation. 'The greatest challenges now emerge more within states than between them and cannot be met by any one nation alone.'
The top US diplomat's two-day trip to Indonesia was aimed at cementing growing ties between the United States and Indonesia, viewed by Washington as a moderate Islamic country that it hopes will wield some influence in a region where anti-American sentiment is rising.
Dr Rice has been at pains during her two-day trip to praise the country's recent democratic reforms, culminating in elections in September 2004. She also reached out to Muslims, visiting an Islamic school under heavy security on Tuesday.
The visit to Indonesia is the second leg of a nine-day trip that started in Chile for the inauguration of that country's first woman president and ends with a three-day visit to another close ally, Australia.
Political analysts and businessmen said they were heartened by Dr Rice's visit and her message. However, they added, the key question is how quickly relations between the world's second and third largest democracies will scale up into a full-fledged partnership.
'Her trip here indicates that bilateral relations are back on a good footing,' said Avi Dwipayana, president director of Trimegah Securities. 'We hope that US companies will see her trip here as a strong signal to invest and do business with Indonesia.'
Washington now views Indonesia as an important strategic partner given its new-found democratic credentials and its role as the world's largest Muslim nation.
Dr Rice noted in her speech that Indonesia can play a vital role on three fronts: helping to improve maritime security in the Malacca Straits; fighting the spread of the bird flu; and fighting global terrorism. She praised the country for having brought terrorists to justice.
Washington, said political analysts, now sees Indonesia as a counterweight to China's growing influence in the Pacific and South-east Asia, and is keen to build up the country as a major military and commercial player in the region.
The US restored military ties with Indonesia last November following the election of President Susilo Bambang Yudhoyono. The Bush administration's resumption of military ties includes financial aid to modernise the military and help with counter-terrorism, maritime security and disaster relief.
Washington cut back military ties after Indonesian troops fired on demonstrators in East Timor in 1991, killing dozens, when the tiny territory was part of Indonesia.
Ties were then severed after pro-Jakarta militias backed by elements in the military sacked East Timor in 1999 when the territory opted for independence. The United Nations estimates the militias killed around 1,000 Timorese.
Jakarta is expected to seek military aid for weapons purchases and for training from Washington. In addition, US aid will also help modernise the military and provide further incentives for reforms.
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