Perception and tolerance of economic and political risk is a major factor in Indonesia,
especially after the Bali bombings. These terrorist attacks have put a magnifying glass on top
of the Indonesian internal weaknesses and showed investors the instability of the country.
The slow recovery after the Asian financial crisis has proven us that Indonesia is very slow in
overcoming crisis situations. This is very important information for potential investors in
Indonesia. Indonesia is a country with major problems and potentials of terrorist attacks, riots
or upcoming Muslim extremists. It is of crucial importance to an investor that Indonesia has
the power to overcome crisis situations because it is very unlikely that Indonesia will not be
hit by one or another crisis within the next years to come.