Government mulls IBRA replacement after 2004<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
The government may replace the Indonesian Bank Restructuring
\nAgency (IBRA) with one or several state companies that would take
\nover IBRA's unfinished asset sales and credit restructuring
\ntasks, after the agency reaches its sunset date in Feb. 2004.<\/p>\n
Coordinating Minister for the Economy, Dorodjatun Kuntjoro-
\nJakti said the idea was at an early stage, and by 2004 would be
\nsubject to approval by a new government.<\/p>\n
\"We are considering various options, and may imitate models
\nused in other countries,\" Dorodjatun told reporters after a
\ncoordinating meeting between economic ministers.<\/p>\n
IBRA was set up in 1998 as part of a government-funded bail
\nout program for banks hit by the 1997 economic crisis.<\/p>\n
Its main task is to restructure sick banks by, among other
\nthings, replacing their bad loans with government bonds.<\/p>\n
With more than Rp 600 trillion spent on curing banks, the bail
\nout program for banks is one of the world's costliest.<\/p>\n
To recover the public funds, the agency restructures the non-
\nperforming loans and sells them back to the banking sector.<\/p>\n
It is also tasked with selling assets of debtors that have
\nbeen surrendered as part of debt repayments or as collateral.<\/p>\n
As IBRA took over debtors' assets, most of the country's
\nprivate sector, which had previously been driving the economy,
\nhas fallen under state control.<\/p>\n
Their return to the private sector is seen as important to
\nrevitalize the economy, since under IBRA most of the assets are
\nsaid to be poorly managed.<\/p>\n
But IBRA has been slow in its asset sales, and economists
\nbemoan the intense politicking in the agency interfering with its
\nwork.<\/p>\n
Many of its debt work outs span mare than 10 years, with
\nothers leading IBRA to own equity or properties that were hard to
\nsell.<\/p>\n
IBRA chairman I Gede Putu Ary Suta has said it was impossible
\nto dispose of the assets IBRA has amassed under debt
\nrestructuring deals by 2004.<\/p>\n
State Minister for State Enterprises Laksamana Sukardi, who is
\nin charge of IBRA, said IBRA's replacement would finish the job.<\/p>\n
\"We haven't decided on whether there'll be one or more
\n(replacements), it's likely that we'll form several based on the
\nsectors,\" Laksamana said.<\/p>\n
He said the government might form a special joint venture to
\nunload IBRA property assets once the agency ceased to exist.<\/p>\n
Last year Ary Suta said he had planned to propose the forming
\nof holding companies to handle the sale of IBRA properties and
\nequity.<\/p>",
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