Jakarta - Indonesia`s newfound hopes of political stability will not alone be enough to tempt wealthy Indonesian-Chinese to bring back billions of dollars sent abroad during the country`s turmoil.

And that hesitancy in turn could seriously hinder Indonesia`s efforts to get its economy firmly back on the recovery track, since by some counts enough money flowed out during the crisis to cover two years of imports or the country`s corporate foreign debt.

New President Abdurrahman Wahid visited Singapore at the weekend and persuading Indonesian-Chinese businessmen to return their money was at the top of his agenda.

But despite signs some funds were trickling back, analysts say for the trickle to become a torrent investment conditions must improve - and that means above all fostering trust in the legal system.

"People need to see that the law is being upheld, that there is legal certainty," said Frans Winarta, a prominent Chinese-Indonesian lawyer. "Otherwise, how would you feel secure running your business here?"

Experts say the government will also need to come up with new incentives to attract long-term money.

"These people, like any other capitalists, will invest their money if there is an acceptable return," said Budi Hikmat, an analyst at Jakarta`s Bahana Securities.

But for the moment, in a chicken-and-egg dilemma, the investors needed to improve the economy are wary of returning because of the huge hurdles it still faces.

The banking sector is a mess, companies are crippled by debt, poverty and unemployment are up, income gaps are widening and corruption remains pervasive.

Estimates vary widely, but tens of billions of dollars were thought to have left the country over the past two years. Much of these funds were owned by ethnic Chinese who became a target of attacks during former President Suharto`s downfall in May 1998.

The group accounts for less than 5 percent of Indonesia`s population but controls a huge chunk of the economy.

One prominent Indonesian-Chinese tycoon, Sofyan Wanandi - who himself spent months in Singapore - was quoted by local newspapers as saying wealthy Indonesians were ready to repatriate up to $10 billion.

Irwan Junus, the head of research at Indosuez WI Carr securities, estimated the capital outflow during Indonesia`s crisis was about $80 billion.

That is equivalent to over two years` worth of imports and would be enough to cover the country`s corporate foreign debt.

A first test before tycoons put more money where their mouths are, will be how President Wahid`s government handles the Bank Bali corruption scandal, which helped end his predecessor BJ Habibie`s chance of re-election last month and which prompted the International Monetary Fund to suspend loans. - Reuters