Indonesia's new government is trying to lure back billions of dollars shifted abroad by Chinese Indonesian businessmen during two years of political instability.

No one knows exactly how much money is involved but over the past 30 years or so, Indonesian Chinese businessmen have been moving money overseas as a hedge against instability.

Ethnic Chinese make up less than 5% of the population, but their dominance over the economy made them easy targets in times of popular discontent.

Shockwaves

When former President Suharto fell last May, rioters trashed hundreds of ethnic Chinese concerns, sending shockwaves through the community.

President Wahid wants to reshape the relationship with ethnic Chinese

The subject of capital flight is a sensitive one for Indonesia and its neighbours. Ethnic Chinese have moved their money quietly to avoid accusations of disloyalty.

One of the main recipients of the funds has been Singapore, which will not even publish trade figures with Jakarta because they pale into insignificance compared with the amount of capital flowing in.

But bankers in Singapore estimate up to $20bn may have left Indonesia during the past two years alone. Other funds are thought to have found their way to Hong Kong , Europe and America.

Students demand economic and political reforms from President Suharto

Now Indonesia's new President Abdurrahman Wahid wants to re-shape the relationship with Indonesia's ethnic Chinese minority.

He has appointed one of them, Kwik Kian Gie, as co-ordinating minister for the economy.

Willing to reinvest

On a recent visit to Singapore, Mr Wahid addressed an audience of leading Indonesian Chinese businessmen and foreign investors with reassuring words. And local newspapers have carried reports of top tycoons pledging to give Indonesia another try.

One of the main recipients of funds has been Singapore

Gemala Group Chairman Sofyan Wanandi, forced to flee the country last year, has expressed a willingness to reinvest.

Others such as Liem Sioe Liong of the Salim Group, whose house was attacked and looted, and Eka Cipta Wijaya of Sinar Mas are reported to have received security guarantees from the president himself.

Analysts say once ethnic Chinese money starts being repatriated, foreign investors will follow.

But for now, Indonesia is not an attractive option for either type of investor.

Concern over economic team

Foreign banks are still trying to recover an estimated $63bn owed by the private sector - loans extended before the Asian crash. And many assets and bad loans formerly owned by the ethnic Chinese conglomerates have yet to be sorted out by the Indonesian Bank Restructuring Agency.

Indeed, the conglomerates have now been reduced to about 20% of their original size and will themselves need foreign investment to develop their activities.

Leading members of the ethnic Chinese community also say there are worries over the government's new economic team.

Optimism at street level

Mr Kwik, who heads the economy, is perceived as a controversial populist opposed to big Chinese business. His finance minister, Bambang Sudibyo, is allied to the parliamentary speaker Amien Rais, who has been unsympathetic to ethnic Chinese in the past.

But the burden cannot all fall on the government. Many of the big tycoons got rich in an era of cronyism and corruption. And they will have to prove they are committed to better business practice.

But they also want to wait and see what the government's policies are going to be and whether it sticks to its promise to improve the legal system.