Govt warned against excessive interference in IBRA<\/p>\n
JAKARTA (JP): Economists warned the government on Saturday
\nagainst excessive interference in the management of the
\nIndonesian Bank Restructuring Agency (IBRA) following the placing
\nof the key agency under the supervision of State Minister for
\nState Enterprises Laksamana Sukardi, a confidant of President
\nMegawati Soekarnoputri.<\/p>\n
\"Can IBRA now act independently? A minister will be directly
\ninvolved ... It will give rise to unhealthy perceptions,\" he told
\nThe Jakarta Post.<\/p>\n
On Sept. 13, Megawati signed two decrees: Number 63\/2001 and
\n64\/2001 on the transfer of authority over IBRA and the country's
\nstate-owned enterprises from the finance ministry to the Office
\nof the State Minister for State Enterprises.<\/p>\n
With the new decree, Laksamana will also have the right to
\nappoint and dismiss key IBRA people.<\/p>\n
The government has argued that the transfer was needed to
\nreduce the work load of the finance ministry and to improve
\nefficiency as the privatization program being carried out by the
\nOffice of the State Minister for State Enterprises was basically
\nsimilar to IBRA's asset sale program.<\/p>\n
IBRA controls assets worth around Rp 600 trillion (US$66
\nbillion) which were transferred from former bank owners, and
\nclosed and troubled banks. Since its establishment in early
\n1998, the agency has often been the target of interference by
\npoliticians and influential businessmen.<\/p>\n
The agency must restructure the assets and sell them to the
\nmarket to raise cash to help cover the state budget deficit.<\/p>\n
IBRA is targeted to raise Rp 27 trillion in cash this year,
\nand Rp 35.3 trillion next year, while the privatization program
\nis targeted to raise some Rp 6.5 trillion.<\/p>\n
Pande, however, doubted that the integration of the two
\nfunctions -- privatization of state-owned enterprises and the
\nsale of assets managed by IBRA -- would be more effective under
\none organization.<\/p>\n
\"That's just an excuse people are using to justify the
\nintegration. While I'm not saying that it's wrong, how can
\nputting sick assets together with more sick assets produce a
\nhealthy outcome?\" he said, explaining that all the state-owned
\ncompanies targeted for privatization and the assets to be sold by
\nIBRA had in common was that they were \"sick\" assets.<\/p>\n
Pande was also concerned about the political nuances
\nsurrounding the integration, saying that Laksamana was also an
\nexecutive of Megawati's Indonesian Democratic Party of Struggle.<\/p>\n
\"This could lead to a very unhealthy impression which should
\nat all costs be avoided,\" he added.<\/p>\n
Bustanul Arifin, an economist from the Institute for
\nDevelopment of Economics and Finance (Indef), said the deep
\npolitical implications of the integration of IBRA into
\nLaksamana's portfolio could become the bane of the current
\ngovernment.<\/p>\n
\"I'm afraid that if this government interferes too much (with
\nthe operations of IBRA) and deviates from the rules of
\ntransparency, this administration will be digging its own grave,\"
\nhe said.<\/p>\n
Bustanul explained that as a major source of finance, putting
\nthe sale of IBRA assets and of state enterprises under a \"party
\nman\" would give rise to suspicions that the proceeds of asset
\nsales would go into the party's coffers.<\/p>\n
Both Pande and Bustanul agreed that Laksamana would have to
\nconvince a lot of people that he was not working for the benefit
\nof his party but rather for that of the country.<\/p>\n
\"IBRA has to be accountable, be open to the public and
\ninformation has to remain accessible to the public,\" Bustanul
\nsaid, explaining that greater transparency was needed especially
\nas the overhead costs of the agency was very high while the
\npublic had yet to see any significant results from asset sales.<\/p>\n
Separately, Golkar party legislator Paskah Suzetta questioned
\nthe legitimacy of the integration, saying that it was against the
\n1998 law on banking.<\/p>\n
Also voicing concern over the loss of IBRA's independence, he
\nexplained that the law on banking stipulated that the government
\ncould establish a special body on a temporary basis to
\nrestructure unhealthy banks, including selling off assets
\nbelonging to those banks.<\/p>\n
Paskah, who sits on the House of Representative's Commission
\nIX on financial and development planning affairs, asserted that
\nincorporating this special body into the government structure
\nwould directly violate the law.<\/p>\n
He said that the House would invite the minister of finance to
\na hearing next week to explain the presidential decree.(tnt)<\/p>",
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