How does terrorism affect the inflow of FDI in Indonesia

Kruunenberg, Robertjan Christian (2008) How does terrorism affect the inflow of FDI in Indonesia. Bachelor thesis, Petra Christian University.

Abstract

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.

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