As in any developing nations, the Indonesian capital market flourished with noteworthy growth throughout the 1990's with market capitalization of Rp. 25 billion in 1992 to Rp. 452 trillion in 1999 accounting for 277 public listed entities. Since May 1995, the implementation of computerized auction system known as JATS (The Jakarta Automated Trading System) had increased both transaction volume and market liquidity from Rp. 64.7 to Rp 295.8 trillion in 1999. Having the luxury of social stability and a sound political structure, the capital market sector enjoyed unprecedented progress since its inception prior to the Asian financial crisis of 1997.

The 1997 contagion effect that ensues resulted in an economy meltdown in neighboring Asian countries, particularly Indonesia that saw its currency devalued above 70% and a negative GDP growth of - 13.7% in 1998. Amidst a period of social turmoil and political uncertainty, the crash conceived a necessity for both social and political transformation brought about by the "Reformation" movement of 1998 that ended in civil parliamentarian rule and subsequent governmental democracy.

Conditions changes as time permits entering the new millennium, market expectations proved resilient and adapted changes of an economy in transition. Despite present adversities, Indonesia nevertheless with its abundance in resources and cultural dynamics would eventually persevere and prevail as an emerging market to be reckoned with.

PROMISING PROSPECTS

For a decade, Indonesia had managed an average annual growth of 7.6% in Gross Domestic Product (GDP) prior to the Asian financial crisis of 1997. Experiencing growth contraction with inflationary rate of 77.6% in 1998, the country had thereafter established its route towards recovery with projected growth of 5% in 2001 and the precrisis level of 8 % within the next two years.

INDONESIA NEVERTHELESS WITH ITS ABUNDANCE IN RESOURCES AND CULTURAL DYNAMICS WOULD EVENTUALLY PERSEVERE AND PREVAIL AS AN EMERGING MARKET TO BE RECKONED WITH

AN ECONOMY IN TRANSITION REQUIRES A PROCESS OF TRANSFORMATION WHICH ONLY TIME WOULD UNFOLD AS WE HOLD CONFIDENT THE POTENTIALS AND PROSPECTS OF A BETTER TOMORROW

Both economic and political reforms, initiated in 1998 had since enhanced the country's economic pulse, thus yielding the gradual progress anticipated by investors. Embracing a revived nationalistic sense, this sway set the momentum for local investor predominance as illustrated during the market bull of 1999 when the Jakarta Stock Exchange Composite Index, better known as IHSG, reached the 700 benchmark and domestic investors accounting for over 85% of transaction volume.

Likewise IBRA, the Indonesian Banking Restructuring Agency, having the formidable task of reviving the ailing banking sector and currency exposed industry had since undertaken a massive re-capitalization and restructuring program en route to better corporate governance and transparency. Though not bearing immediate results, red-tape bureaucracy of the past had since make shift to better ideologies and mentality in practice. Moreover, a more conducive and liberal environment cultivates improved competency and professionalism that consequently fuels economic growth and sustainable development.

With these as the driving forces of an efficient market, the incorporation of eligible companies into capital market becomes imperative in an area of regional free trade which ultimately transforms the capital market into a more effective intermediary for investments and mode of transactions.

With changes come challenges that warrants refined managerial capabilities that in years would be suitably curtailed by the finest to survive. In all, an economy in transition requires a process of transformation which only time would unfold as we hold confident the potentials and prospects of a better tomorrow.

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