Global traders and investors who less than a year ago were rushing breathlessly into promising new markets overseas are confronting a sobering realization:

It's scary out there.

With rioting in Indonesia, a potential nuclear arms race between India and Pakistan and continuing financial disarray in Southeast Asia, the global marketplace no longer looks quite as hospitable as it did just several months ago.

While few companies are preparing to abandon the global arena altogether, many are rethinking their near-term strategies especially in Asia, which has been particularly volatile of late.

Consider Norman Krieger Inc., a freight-forwarder in the Los Angeles International Airport area with a large number of clients in the apparel industry. After years of activity in Southeast Asia, the firm has been steadily building its business in India, Pakistan and Bangladesh all of which have emerged as major exporters of textiles and finished apparel.

The company had planned to send an executive to India this week to meet with manufacturers and shipping agents. But, at least for now, that trip has been cancelled.

"I don't think it's a good time to send somebody to India or Pakistan," said Robert Krieger, the firm's president. "Let's see what happens in the next couple of weeks."

Krieger is not the only one keeping a close tap on the situation. Political unrest in Indonesia has claimed the lives of more than 500 people in the past few weeks, sparking an exodus of the country's expatriate business community and its small but powerful ethnic-Chinese merchant class. Although Indonesia President Suharto resigned last week, the country's economy remains in shambles a fact which analysts say could stall nascent recoveries under way elsewhere in Southeast Asia.

Meanwhile India, to the delight of many of its citizens, recently detonated five nuclear bombs a move which is likely to provoke neighboring Pakistan to undertake nuclear tests of its own, and which could draw a response from Pakistan's ally, China. In the wake the Indian tests, the United States imposed wide-ranging sanctions on India affecting trade, technical cooperation and international financial assistance, and has asked other nations to follow suit.

Those conflagrations follow months of financial turmoil throughout Asia. The once-roaring economies of South Korea, Malaysia and Thailand have seen their currencies lose as much as 70 percent of their value, almost completely eroding demand for U.S.-made goods. Even Japan, the region's economic powerhouse, is stumbling.

It has all led to a kind of intellectual whiplash among many trade-watchers here.

"Last year at this time, there was a lot of skepticism about Europe and everybody was looking at Asia," said Jack Kyser, chief economist of the Economic Development Corp. of L.A. County. "Now, all of a sudden, you have to say that Asia is a very troubled area. A region that was once so promising has become very, very scary."

However dramatic, events in Indonesia, India and Pakistan are unlikely to have a major economic impact on Los Angeles, as all three countries are fairly minor trading partners with the region.

In 1997, the value of two-way trade with Indonesia through the Los Angeles Customs District totaled $4 billion, according to the U.S. Department of Commerce. Trade with India was $1.3 billion and trade with Pakistan just $348 million.

Trade with China, by comparison, was more than $25 billion during the same period, and trade with South Korea totaled nearly $13 billion.

The impact, however, is certain to be felt at the numerous local companies that do business with those countries.

Indeed, caution about the region is by no means limited to small outfits like Krieger's.

Los Angeles-based Atlantic Richfield Co., which has substantial offshore oil and natural-gas operations in Indonesia, last week closed its Jakarta offices, chartered a jet and evacuated 320 people 90 employees and their families to nearby Singapore.

Rather than waiting out the crisis in a hotel, most of those workers will be taking a vacation or returning to offices in the United States, said Arco spokesman Al Greenstein. "That way, they can still continue to do some company work," he said.

The company's platforms, which are staffed mostly by Indonesian nationals, continue to pump out crude oil and natural gas, Greenstein added.

As for the company's long-term strategy in the area, there are no plans to abandon Indonesia, a mineral-rich nation where Arco has operated for some 30 years.

"You have to be flexible. We expect that there are going to be economic, political and social ups and downs," Greenstein said. "Those are the things that come with being involved in foreign investment. If you're not prepared to ride them out, you have no business being an overseas investor."

Despite Suharto's resignation, Arco is waiting before sending its people back to Jakarta. "It's still very uncertain," Greenstein said.

Such caution is probably a good idea, according to Henny Priyono, a Jakarta-based furniture importer and exporter who has seen her business almost completely dry up over the past several months.

Despite recent events, Priyono remains nervous about her country's economic prospects.

"Our currency is unstable, our politics are unstable. This is a very sick country," Priyono said in a phone interview from Jakarta last week. "We don't have a feeling of confidence doing business in this country anymore."

Priyono is hardly alone in her lack of confidence.

"What was once a major market for American products is now a series of disasters," said Stephen T. Wise, president of California Furniture Exports, a Studio City firm that exports California-made home furnishings to Asian retailers and distributors. "Not only can they not buy products because demand is not there, but they don't know in the morning what the afternoon fixing on the currency will be."

The so-called "Asian contagion" has led Wise to reflect on the early 1990s, when traders with Asia looked with sympathy and not a small amount of smugness at their peers doing business with Mexico, which was mired in a severe economic crisis of its own.

"Now, the Mexican business is picking up," said Wise, whose sales are down 80 percent from this time last year. "We thought that nothing like that could happen to us in Asia."

That kind of overconfidence, on a global scale, is partly to blame for the current crisis, said Gregory Fager, director of the Asia department of the Institute of International Finance, an association of international financial institutions in Washington, D.C.

"Over-enthusiastic foreign investors fueled a lot of this," said Fager. "Those economies were unsustainable. There is no such thing as a sure bet. There is no 'Asian Miracle.' "

Rather than the norm, years of double-digit economic growth in Asia should be viewed as a historical anomaly, he said.

"People's memories are exceptionally short," Fager said. "Uncertainty and risk and turmoil would seem to be the norm."

Added Rajeev Dhawan, director of econometric forecasting for the UCLA Anderson Forecast: "Risk and return is the highest rule of economics. You can't have something for nothing. In emerging markets, you can make 30 percent, but you can lose everything as well."

And despite the current state of turmoil across much of the globe, it's a risk that some investors remain willing to take.

BAT International, a Burbank-based manufacturer of electric motors and vehicles, is continuing with plans to build a multimillion-dollar battery plant in Southern India, said Joseph LaStella, the firm's president.

In fact, widespread anxiety about India actually could be an advantage for BAT International, said Stella, who plans to travel to the region this week.

"Everyone is so weary about India now, I can go there and make the best deals in the world," he said. "I'll be the only one there doing business. It opens up a brand new ballgame."

Similarly optimistic is Jim Yang, purchasing manager for Linden Trading Co. Inc. in Compton, a wholly-owned subsidiary of Singapore-based Asia Pulp & Paper Co., one of the world's largest pulp and paper producers.

Yang's job is to procure raw materials for the company's paper mills in Indonesia and sell finished products to U.S. distributors. The Asian crisis, he said, has cut into demand for raw materials and sent prices of finished goods plummeting. And turmoil in Indonesia has meant that containers full of U.S. waste paper are sitting on the docks in Jakarta, waiting to be transported to the mills.

Nonetheless, Yang insists that Indonesia is fast bottoming out which means it has no place to go but up.

"I think it's a great investment opportunity now," he said. "A lot of stocks have been going down. I think it's going to bounce back. It could take a while. But I have confidence in Indonesia."

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