JAKARTA (Reuters) - Indonesian President Susilo Bambang Yudhoyono said on Tuesday that the Southeast Asian country could guarantee security after deadly suicide bomb attacks on two luxury hotels in Jakarta last week.
Friday's suicide bombings at the JW Marriott and Ritz-Carlton hotels killed nine people and wounded 53, including foreigners and Indonesians.
"My message to the world is that Indonesia can overcome this problem and will continue to guarantee even greater security in the future," Yudhoyono said during a speech to inaugurate a new museum in the capital.
"In terms of the investigation, the police are being assisted by the military and the intelligence agency and I am monitoring their efforts," he added. "I am certain that we will be able to immediately resolve last Friday's incident."
The attacks bear the hallmarks of Jemaah Islamiah, the Southeast Asian militant Muslim group, in that they targeted Western hotels and foreign nationals. The group was responsible for several previous attacks in Indonesia, including the 2002 bomb blasts in Bali which killed 202 people.
Security has been raised in Indonesia since Friday's attacks and offices from the bomb squad were searching an office building in central Jakarta on Tuesday near the Australian embassy after caller telephoned several bomb threats.
Banks including Royal Bank of Scotland and Singapore's DBS have temporarily banned staff from visiting Indonesia, the world's most populous Muslim country, while Citigroup Inc and other banks have imposed restrictions on staff travel.
"If you are the regional director of a big firm, will you send your staff today or tell them to wait a few weeks? I think the latter," said Hans Vriens, a Singapore-based consultant, adding that this was likely to be a temporary setback.
But such measures are unlikely to have much impact on Indonesia's economy provided Friday's attacks are not the start of a new wave of bombings, analysts said.
GOOD ECONOMIC OUTLOOK
Investor interest in emerging market Indonesia has picked up in recent months, thanks to this month's re-election of reform-minded Yudhoyono and the prospect of economic growth.
The central bank has forecast growth of between 3-4 percent this year, making Indonesia one of the few bright spots in Asia thanks to strong consumer demand in a country of 226 million people with a growing middle class.
"There's not much GDP impact from this. Improving global fundamentals outweigh this country-specific impact, the world is repositioning for a stronger growth outlook and that's very bullish for Indonesia," said Tim Condon, economist at ING in Singapore. "Indonesia was a darling, everyone was doing business there."
Volkswagen AG, Europe's largest carmaker, and British American Tobacco Plc, the world's No. 2 cigarette maker, have invested in Indonesia, and firms ranging from toothpaste makers to oil and gas giants are lining up.
"The rest of the neighbourhood looks bad and that has helped Indonesia," said consultant Vriens. "Indonesia has an emerging middle class, it's a serious country, you have to be there."
Yudhoyono must nevertheless restore confidence, analysts said.
"As a security challenge, the threat of Islamist terrorism is likely to linger and the government will need to invest substantial resources to keep the threat under control," David Kiu, of political risk group Eurasia, wrote in a report.
"The bombings will shore up domestic public and international support for Yudhoyono to take a harsher stance towards radical Islamism and terrorist-linked activities."
(Additional reporting by Andre Ismar, Aloysius Bhui, and Saeed Azhar in Singapore)
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