Dear members,                                                                                         December 2003

This is one of the times where holidays come close to one another at the end of the year.

We at LGS Online wish you Ied Mubarak, very merry Christmas, and happy new and prosperous New Year 2004.

Many important events occurred in 2003, and will occur next year in Indonesia. Those events will eventually change many facets of Indonesia. Indonesia terminated the IMF bailout program. IBRA will be closed, and bank restructuring and settlement of major debts will have to be completed. The general elections will occur, and for the first time ever, direct election for members of the Parliament and Regional Representatives, and the President and Vice President, will be introduced and implemented. 220 million people, stretched from across Sumatra to West Irian, and from the simplest societies that lack education and infra structure to the most modern cosmopolitan communities, will have to elect directly their representatives, President and Vice President. Despite of rising arguments on whether or not this coming general election will be bloody or peaceful, many analysts generally believe that the Indonesian people are politically maturing. The total commitment of the civil society to monitor this election, and the drawing of attention from all over the world to make sure we will have a democratic election, will move everybody who trust in the future of Indonesia to work together to achieve a democratic election. If done properly and democratically, this will become a basic foundation for a better future for Indonesia, and will change Indonesia into one of the biggest democratic countries on this globe. This means Indonesia will be more prepared to enter into a freer markets, and this is a good sign for investment, business and trade.

The business sector should have an influential role in such changes. In the past, corruption was also triggered by corrupt practices within the business sector. If the government is elected democratically, application of good governance principles would become promising. It will accelerate the reform efforts if the business sector supports the clean and good government by applying consistently the principles of good corporate governance. If good government and clean business work together hand in hand to build a new healthy business environment, the judiciary sector will also reform itself to invest in the development of the national integrity system. If the members of the Parliament are elected democratically, their checks-and-balances role will be a legitimate one. If the supervising auditing or supervising institutions are empowered, transparency and accountability of the government will be guaranteed. If the civil society is involved in the provision of moral powers to the reform efforts, such efforts will be morally and socially justified. The combination of the aforementioned efforts is believed to be in the process of forming right now, despite pending problems in the areas of good governance, money politics, security issues, and separatism threats in certain regions that need to be addressed by all elements of the nation.

One good news is that recently a newly-established Anti Corruption Commission has new board members, selected in a vigorous and open system involving the government, civil society and the Parliament. If supported sufficiently, this Commission will also give the hope that existing corruption will have to end, and past corruptions will have to be brought to an independent anti-corruption court, and a new strategy against corruption will have to be established and implemented in the name of law and justice, and in the interests of the public at large.

Nevertheless investment and business can not stop and wait for the result of the reform efforts. Economic gears must continue to roll, and the law of supply and demand can work in any condition.  Some business might consider the present situation as fragile or untimely for investment or business decision-making. Honestly, the Megawati administration has not been too bad at all at managing the crisis. Improvements are underway. The main hurdle is that investors cannot be convinced that Indonesia is a better market than other similar markets. With that in mind, business people are encouraged to prepare their investment and business strategy now to anticipate that soon Indonesia will be too big to ignore. LGS Online and LGS law firm are meant to assist the business community to undergo such preparation. Contact us, and we can build our future together in the better Indonesia.

Have a wonderful and peaceful holiday season.

Arief Surowidjojo

CEO