AsiaInt Economic Intelligence Review, April 2005

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http://www.asiaint.com/arl/arl5908.asp - 2,501 words

Concerns over corruption and the rule of law - or the lack of it - have kept foreign investors out of Indonesia over the last year or so. In the meantime, the country's bankers have been much more confident, with the result that lending has surged from a low base. Essentially, the bankers have shown their confidence in the administration of President Susilo Bambang Yudhoyono. The growth in lending varies widely across the country. However, figures from Bank Indonesia indicate that the expansion - and implicitly the growth of the economy - has been fastest outside Jakarta. Going forward, it appears likely that the country will benefit from the long process of reform and restructuring in the banking sector. Indonesia's largest banks enjoy greater size and/or foreign support than their counterparts in the Philippines or, indeed, in some vastly richer countries_