Business embroilment<\/p>\n
The government has finally admitted what businesspeople have
\nbeen concerned about: a likely backlash against the business
\nworld in the stepped-up drive against corruption, collusion and
\nnepotism (KKN). Coordinating Minister for the Economy, Finance
\nand Industry Kwik Kian Gie told the House of Representatives on
\nWednesday that the government, determined to build good
\ngovernance both in the public and private sectors, is facing a
\ndilemma.<\/p>\n
Cracking down vigorously on KKN in the business world might
\ncripple economic activities as a great number of businesspeople
\nwere, one way or another, implicated in those evils, which were
\naccepted as common business practice during the Soeharto and B.J.
\nHabibie administrations.<\/p>\n
The great fanfare in which the Texmaco loan case was disclosed
\nand submitted to the Attorney General's Office last week
\nunintendedly caused a massive run on Bank Putera Multikarsa, a
\nunit of the Texmaco Group. The bank, suspended by Bank Indonesia
\nfrom clearing activities on Tuesday, might have to be taken over
\nand put under the Indonesian Bank Restructuring Agency (IBRA) at
\nthe expense of taxpayers if the owners cannot come up with fresh
\nmoney to settle the negative balance. Under the new central bank
\nlaw, Bank Indonesia can no longer inject liquidity credits to the
\nbanking industry. Liquidation or takeover of Bank Putera
\nMultikarsa would be another major setback to the bank
\nrestructuring program, which is the key to economic recovery.<\/p>\n
Several businessmen have complained about losing foreign
\norders or the confidence of their creditors due to the fallout
\nfrom what they saw as disproportionately negative publicity based
\non incomplete, immature or inaccurate remarks by officials or in
\ndocuments leaked to mass media.<\/p>\n
However, the risk of shocking the business world obviously
\ncannot be used as an excuse to simply forgive all the past sins
\nof businesspeople and officials, or to be discriminative in
\ndisclosing and prosecuting KKN cases.<\/p>\n
Abdurrahman Wahid, elected to the presidency mostly on the
\nback of his integrity, is duty bound to act firmly, fairly and
\nconsistently to crack down on KKN if he is really serious about
\nmaintaining legitimacy and credibility, thus far the only assets
\nhe can capitalize on in sustaining popular support for his
\ncompromise, coalition Cabinet.<\/p>\n
Investigating and prosecuting past KKN cases, instead of
\nhurting market sentiment, will actually strengthen investor
\nconfidence in the economy because the drive will eventually
\nenhance good corporate governance. Moreover, political stability
\nwithout credible law enforcement means nothing to the business
\nsector.<\/p>\n
The government can minimize the risk of unintentionally
\ndamaging businesses if it pursues the anti-KKN drive through a
\ngood balancing act: prosecuting businesspeople involved in KKN
\npractices but seeing to it that their businesses, if still
\ncommercially viable, continue normal operations. After all, the
\ntarget of the campaign is not enterprises but the behavior of
\nbusinesspeople or business executives.<\/p>\n
The anticorruption campaign should also distinguish bad debts
\ncaused mainly by the economic crisis from those inflicted by a
\ncombination of KKN and economic depression. Certainly not all of
\nthe approximately 2,000 big debtors currently handled by IBRA
\nshould be blamed on KKN. Quite a number of them were well-managed
\nenterprises which went under only because of the economic crisis.
\nIn fact, very few major companies, even those oriented mainly to
\nthe export market, could weather Indonesia's economic woes over
\nthe past two years, when the rupiah's exchange rate collapsed to
\nas low as Rp 17,000 per U.S. dollar last year from Rp 3,000 in
\nlate 1997, the interest rates skyrocketed to as high as 70
\npercent and the economy contracted by almost 14 percent.<\/p>\n
The most important, yet most delicate, task now is how to
\nprevent measures taken within the anti-KKN drive from excesses
\nthat could unintentionally create misleading, or confusing
\ninformation in the market. We all know that the market is highly
\nsensitive to information.<\/p>\n
But a balancing act is not an easy exercise in this reform era
\nthat demands high standards of transparency and public
\naccountability. Officials who refrain from making comments or
\nstatements about major issues could be accused of cover-ups. Just
\nlook at how officials have been under constant, almost daily,
\npressure from reporters hunting for \"hot, juicy\" news. And bad
\nthings such as scandals and KKN cases usually hot news that sells
\nnewspapers.<\/p>\n
The problem, though, is that premature remarks, incomplete or
\ndisproportionate statements about businesspeople alleged or
\nrumored to be involved in KKN practices could mislead and confuse
\nthe market or cause their businesses to lose market confidence.<\/p>\n
It is imperative that officials, notably law-enforcement
\nofficers, while acting firmly and fairly, should tread carefully
\nwhen investigating KKN cases, refraining from commenting on cases
\nstill under investigation and not jumbling up KKN-implicated
\nentrepreneurs with the viability of their businesses.<\/p>\n
However, the public will understand and accept such restraint,
\nand not misconstrue it for a cover-up, only if people are really
\nconvinced that the government is truly serious and not
\ndiscriminative in cracking down on KKN. Gaining such public trust
\nand support requires the government to produce definitive
\nperformances by successfully prosecuting several high-profile
\ncases, which have widely been perceived to be blatant corruption
\nand yet remain untouched by the law.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/business-embroilment-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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