Herbert Smith will be hoping to cash in on renewed interest from the West in Indonesia.

The country remains a hotbed of political instability – only last week US citizens were advised not to travel into the region because of anti-US demonstrations.

It is predicted that next year, economic growth in the region will remain at the same sluggish 4 per cent that it hit this year.

The Indonesian Bank Restructuring Agency is still battling to repair the damage caused by the Asian financial crisis, while corruption remains a widespread problem and the country’s underdeveloped bankruptcy laws are considered to be in need of modernisation.

Despite all these factors, consumer spending is on the up, due in part to high oil prices and a weak rupiah which will spur on Western investors.

Herbert Smith is just one of three firms which is believed to have a presence in Indonesia. Clifford Chance penetrated the region earlier this year (The Lawyer, 31 January) while Norton Rose has had a presence in the region for more than five years.