1. US. financial crisis and its contagion to Europe and the rest of the world could also create new opportunity for
Indonesia in term of foreign direc investment and the development of basic infrastructure.
As the US. financial crisis has now spread to Europe, the oil-rich countries such as Saudi Arabia, Kuwait and Arab
Emirate which have accumulated hundreds of billion of Dollars in their foreign reserve, are now reviewing their
holding or investment vehicle. They are looking for more diversified investment outside the US and Europe.
Because of unfavorable political developments in Thailand and Malaysia over the past few months, Indonesia which
has largely Muslim population could become one of these oil-rich countries' favorite place for foreign direct
investment. That wil be true if the conditions, legal and market infrastructure are conducive for Islamic financial
instruments.
The government had improved the legal framework with the recent actment of laws on sharia banking and bonds.
The long term nature of Islamic bonds could make them the most suitable investment instrument for Indonesia, as
these bonds grant an investor a share in an asset along with the cash flows and risks commensurate with such
ownership.
The financial crisis that has gripped the globe and weakening economic growth in the rest of the world will serve to
the government to accelerate the investment reform measures in order to grab the hidden opportunity in the global
crisis. (simplified from the jakartapos.com on Oct 9)