'Debt extension plan will prolong IBRA's mandate'<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The controversial policy of the powerful Financial Sector Policy
\nCommittee (FSPC) to ease the repayment terms for the huge debts
\nowed by former bank owners implies that the life of the
\nIndonesian Bank Restructuring Agency (IBRA) would have to be
\nextended for at least another six years, according to State
\nMinister for National Development Planning Kwik Kian Gie.<\/p>\n
"The decision of the FSPC ... implicitly implies that the
\nexistence of IBRA will be prolonged. Can the FSPC make such a
\ncrucial decision?" Kwik said on Wednesday during a hearing on the
\ndebt extension plan with House of Representatives Commission IX
\non financial affairs.<\/p>\n
IBRA, which first proposed the new debt settlement scheme, is
\nsupposed to end its six-year mandate in 2004.<\/p>\n
The FSPC, which groups senior economic ministers led by
\nCoordinating Minister for the Economy Dorodjatun Kuntjoro-Tjakti
\nand has the final say on major debt restructuring policies,
\ndecided late last year to extend the repayment period for the
\ndebts from four to ten years with interest rates being lowered to
\na minimum of nine percent.<\/p>\n
But the policy has raised controversy as critics said that the
\ngovernment was being soft on bad debtors. The government injected
\nmore than Rp 138 trillion (about US$413 billion) in bailout funds
\nin the wake of the 1998 financial crisis to help the banks stay
\nafloat.<\/p>\n
The government has discussed the FSPC policy at several
\ncabinet meetings but has failed to reach a final conclusion.
\nThree senior ministers have been assigned to review the policy.<\/p>\n
Kwik has been a strong critic of the FSPC policy on the debt
\nextension plan.<\/p>\n
Elsewhere, Kwik also expressed his doubts about the
\nauthenticity of an intelligence document, circulated by IBRA
\nchairman I Putu Gede Ary Suta at a cabinet meeting, which
\nsupported the agency-proposed debt extension plan.<\/p>\n
The report, reportedly drafted by the National Intelligence
\nBody (BIN), said the debt settlement scheme would benefit the
\neconomy as a whole, as it would allow companies to keep operating
\nand generating income, while at the same time creating job
\nopportunities.<\/p>\n
But Kwik said that the report did not carry the signature of
\nBIN's chief Hendroprijono.<\/p>\n
Press reports had earlier quoted the BIN report as saying that
\nthe debt extension plan could trigger social unrest as it ran
\ncontrary to society's sense of justice.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/debt-extension-plan-will-prolong-ibras-mandate-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}