JAKARTA - Malaysian businessmen must bank on Indonesia's long-term business potential and continue investing in their neighbour, Deputy Prime Minister Abdullah Ahmad Badawi said today.

Malaysian businesses should "take a long term view of Indonesia's potential and continue investing here for the future," Abdullah told a business forum in Jakarta.

"There are significant investment opportunities in Indonesia's banking, telecommunications and infrastructure sectors in line with the government's commitment to privatisation of its state-owned enterprises," he said.

Commitment by Indonesian businessmen to open and competitive privatisation "will be met by an equal commitment" by their Malaysian counterparts, said Abdullah, who is leading a delegation including two other ministers and some 72 business chiefs.

The business delegation is led by the chairman of Permodalan Nasional Bhd, Ahmad Sarji bin Abdul Hamid. It also includes Mirzan Mahathir, chairman of Konsortium Logistik Bhd and a son of Prime Minister Dr Mahathir Mohamad.

As Indonesia's "most natural partners on many dimensions", Abdullah said Malaysians should "take bold steps, forge linkages and explore opportunities to collaborate" for the mutual benefit of the two countries.

Malaysia's investment in Indonesia in 2001 totalled RM8.4 billion (US$2.2 billion), he said.

Abdullah, Mahathir's designated successor, praised President Megawati Sukarnoputri and her economic team for being "firmly committed to putting its house in order and to making Indonesia an attractive place for fair-minded foreign investors.

"A strong, stable and prosperous Indonesia is vital to Malaysia's interest," Abdullah said, citing Indonesia's position as the largest country in the 10-member Association of Southeast Asian Nations.

Assets sale

On Monday the Indonesian Banking Restructuring Agency (IBRA) launched the sale of bank loan assets with a book value of RM65 billion (US$17 billion) in an attempt to help cover the government's budget shortfall.

IBRA controls assets with a face value of tens of billions of dollars after a shake-up of the banking industry and the corporate world after the 1997-1998 Asian financial crisis.

Indonesian Vice President Hamzah Haz last week urged local entrepreneurs to form partnerships with Malaysian businessmen to buy the loan assets.

Mahathir said in Malaysia Tuesday that Kuala Lumpur was open to buying IBRA assets but only if such investments were viable.

Abdullah, on the second day of his three-day official visit, will hold talks with parliament speaker Akbar Tanjung and upper house chairman Amien Rais later Tuesday.