IBRA closes, leaves huge tasks behind<\/p>\n
Dadan Wijaksana and Fabiola Desy Unidjaja,
\nThe Jakarta Post, Jakarta<\/p>\n
Most people perceive that messy legal cases and the massive
\ncost of the late 1990's banking crisis are the legacy of the
\nIndonesian Bank Restructuring Agency, which the government
\nofficially dissolved on Friday.<\/p>\n
While the agency was praised for reaching its fiscal target,
\nquestions remain over whether this feat was worthwhile
\nconsidering the huge price that taxpayers must shoulder.<\/p>\n
President Megawati Soekarnoputri was thankful for the agency's
\naccomplishments during its almost six-year tenure, saying the
\nclosure \"was a sign of Indonesia's recovery from a deep crisis.
\nAs President, I thank IBRA's officials for their hard work,\" she
\nsaid.<\/p>\n
Also on a positive note, Coordinating Minister for the Economy
\nDorodjatun Kuntjoro-Jakti, said that various improvements in the
\nbanking sector were examples of a job well done.<\/p>\n
However, until its closure, the agency -- which took over Rp
\n650 trillion worth of assets from troubled banks and former
\nowners following the late 1990s financial crisis -- had only
\nraised around Rp 168.2 trillion from selling the assets. This
\ncomprised of a recovery rate of 28 percent, deemed relatively low
\ncompared to the achievements of similar agencies in other crisis-
\nhit countries.<\/p>\n
The remaining 72 percent was declared \"the cost of the
\ncrisis,\" by IBRA.<\/p>\n
The agency was mandated to recover as much money as it could
\nfrom the assets to recover the government's huge bank bailout
\ncost of around Rp 650 trillion.<\/p>\n
The remaining 72 percent would be recovered from the budget,
\nlimiting its capacity to fund other projects.<\/p>\n
Also, some former bank owners will be cleared of criminal
\ncharges, despite their violation of banking regulations prior to
\nthe crisis and their alleged misappropriation of the bailout
\nfunds.<\/p>\n
IBRA chairman Syafruddin Temenggung said that during its
\noperation, the agency had been \"badly done by\" in court. Some
\nrulings had been against the agency, while the bulk of cases were
\nstill pending.<\/p>\n
There are still 1,361 unsolved legal cases, the majority of
\nwhich center on asset disputes. The cases are worth a total of Rp
\n25 trillion and involve 447 debtors.<\/p>\n
\"To sum up, although not entirely at fault, IBRA was a good
\nexample of an institutional failure. Our messy legal system also
\ncontributed to the fact that the agency preferred to seek out-of-
\ncourt settlements,\" the University of Indonesia's economist
\nChatib Basri told The Jakarta Post.<\/p>\n
Chatib said the agency had failed to fulfill the most crucial
\nof all its tasks, which was to make the country's banking sector
\nhealthier in every aspect, not just financially but in terms of
\nits internal-control mechanism and its intermediary role.<\/p>",
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"sponsor": "Okusi Associates",
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