Government to boost power of indigenous businesspeople<\/p>\n
JAKARTA (JP): The government has stated its intention to
\nincrease the economic power of indigenous Indonesian
\nentrepreneurs through an investment program, according to State
\nMinister for the Empowerment of State Enterprises Tanri Abeng.<\/p>\n
Tanri said on Tuesday the government hoped that the planned PT
\nPermodalan Nasional Madani (PNM) would emulate the success of
\nPermodalan Nasional Berhad in Malaysia, which helped raise the
\nvalue of assets owned by indigenous people from 5 percent in 1970
\nto over 30 percent now.<\/p>\n
\"This has given us motivation to improve the welfare of
\n(indigenous) Indonesian people, and also deal with the problem of
\nthe socio-economic gap in a similar way,\" Tanri said at a seminar
\non PNM.<\/p>\n
To achieve the goal, Tanri said PNM would at first establish
\nventure capital to be used by small and medium enterprises
\n(SMEs).<\/p>\n
PNM's second priority would be to establish an alternative
\nfinancial institution to channel the government's subsidized
\ncredit funds to SMEs, cooperatives and farmers.<\/p>\n
According to the government's letter of intent to the
\nInternational Monetary Fund, the government will reinstate risk
\nsharing by channeling subsidized credits, especially for small
\nfarms, with financial intermediaries to ensure prudent lending
\npractices.<\/p>\n
The third priority of PNM, Tanri said, would be the so-called
\n\"widespread ownership program\", through the establishment of
\nmutual funds and the public sale of SME shares.<\/p>\n
Tanri, however, did not say that the programs would favor
\nIndonesia's indigenous people.<\/p>\n
Indigenous Indonesian businessmen have frequently been left
\nbehind by their ethnic-Chinese counterparts, who have for decades
\ndominated the country's economy.<\/p>\n
There have been repeated calls on the government to follow
\nMalaysia's affirmative policies toward indigenous entrepreneurs.<\/p>\n
Sofyan A. Djalil, a senior staff member at Tanri's office,
\nsaid that through PNM the government aimed to realign the
\neconomic structure, now dominated by big conglomerates, to
\ninclude more smaller-scale businesses<\/p>\n
\"The economic structure inherited from (former president)
\nSoeharto's New Order is such that we have a very few extremely
\nstrong big businesses, while most businesses, that is, small and
\nmedium businesses, are very weak,\" he said.<\/p>\n
\"We also have to correct the imbalance in the country's wealth
\ndistribution through efforts that are in line with the market
\nmechanism.\"<\/p>\n
PNM, therefore, should get wide support from the people, he
\nsaid.<\/p>\n
PNM will have an authorized capital of Rp 1.5 trillion (US$170
\nmillion), of which Rp 300 billion will be allocated from the
\n1999\/2000 state budget.<\/p>\n
PNM's paid-up capital would theoretically increase in line
\nwith the growing number of participants in the programs offered.<\/p>\n
Aries Muftie, the Bank Muamalat director who has been active
\nin the preparation of PNM, said the programs would basically fall
\ninto two classifications, namely, the \"entrepreneur program\" and
\n\"widespread ownership program\".<\/p>\n
In the entrepreneur program, Muftie said, PNM will select
\npotential individuals in microbusinesses to receive subsidized
\nloans of up to Rp 500 million from PNM's soon-to-be-established
\nalternative finance institute.<\/p>\n
PNM would give equity participation between Rp 500 million and
\nRp 10 billion at prospective SMEs, Muftie said.<\/p>\n
For the widespread ownership program, PNM will help the
\ngovernment divest 20 percent of shares in listed state companies
\nto selected individuals, SMEs or cooperatives.<\/p>\n
Muftie said that for the sake of a wider economic interest,
\nthe government would sell its strategic assets to as many
\n\"deserving people\" as possible.<\/p>\n
\"Assets in the economy should not be in the hands of only a
\nfew people. The more people possess the asset, the better for the
\neconomy,\" Muftie said during the PNM programs introduction
\nseminar at Hotel Mulia. (02)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-to-boost-power-of-indigenous-businesspeople-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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