IBRA set to miss Rp 17t target if political woes last<\/p>\n
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
\nwill lose out in the sale of assets under its control if the
\npolitical situation deteriorates after the presidential election,
\nagency deputy chairman Arwin Rasyid said on Wednesday.<\/p>\n
He said he was "optimistic" a Rp 17 trillion (about US$2
\nbillion) target could be met if there was an improvement in the
\npolitical climate after the November presidential election.<\/p>\n
"But if it (political uncertainty) drags on until January,
\nwe're pessimistic," Arwin said.<\/p>\n
IBRA targeted raising a minimum Rp 17 trillion in the current
\nfiscal year ending in March 2000 to help finance the bank
\nrestructuring program. The agency has so far raised some Rp 8
\ntrillion from the sale of various assets in its possession.<\/p>\n
The agency controls hundreds of trillions worth of assets
\nsurrendered by ex-owners of banks to repay their debts to the
\ngovernment and heads of companies which defaulted on loan payment
\nat banks now under its control.<\/p>\n
The bank restructuring program is estimated to cost some Rp
\n600 trillion. The government has so far issued bonds worth more
\nthan Rp 150 trillion in the effort to finance the program.
\nInterest payments for the bonds issue are estimated at Rp 34
\ntrillion in the current fiscal year, half of which is expected to
\nbe covered by IBRA.<\/p>\n
Indonesia is scheduled to hold a presidential election either
\nin late October or early November. Political tension is rising
\nthroughout the country as politicians lay out their agendas.<\/p>\n
President B.J. Habibie is striving to remain in power despite
\ncalls for him to pull out from the presidential race in the wake
\nof the East Timor debacle and the Bank Bali scandal in which
\nseveral of his aides and IBRA officials are implicated.<\/p>\n
Habibie faces a tough challenge from Megawati Soekarnoputri,
\nchairwoman of the Indonesian Democratic Party of Struggle (PDI
\nPerjuangan), which won the June general election with some 34
\npercent of the vote. But the party lacks the majority vote to
\nensure Megawati becomes the next president.<\/p>\n
"Foreign investors are currently taking a wait-and-see
\nstance," Arwin said.<\/p>\n
He said that political stability was crucial for foreign
\ninvestors to return to the country.<\/p>\n
Meanwhile, analysts and businessmen said the Bank Bali scandal
\nwould hinder the bank restructuring program.<\/p>\n
IBRA deputy chairmen Pande Lubis and Farid Harianto have been
\nnamed suspects in a police investigation of the case. The House
\nof Representatives recommended that Habibie suspend agency
\nchairman Glenn S. Yusuf because of direct or indirect involvement
\nin a dubious commission paid by the bank and subsequent dealings.<\/p>\n
"People at IBRA are now afraid to make decisions," said
\nchairman of the Indonesian Chamber of Commerce and Industry
\nAburizal Bakrie.<\/p>\n
Economist Faisal Basri concurred that "they tend to be nervous
\nof signing new decisions. They're afraid of ending up like
\nFarid".<\/p>\n
In a related development, Arwin said that international
\nauditor Ernst & Young would not be able to complete the
\nverification process of interbank claims on closed banks by the
\noriginal deadline of mid-October.<\/p>\n
"They need additional time of four weeks to six weeks because
\nthere are many items to be checked," he said.<\/p>\n
The agency appointed Ernst & Young to audit some Rp 15
\ntrillion in interbank claims made by 10 banks on liquidated
\ninstitutions to determine their eligibility for reimbursement by
\nthe government under its blanket guarantee program. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ibra-set-to-miss-rp-17t-target-if-political-woes-last-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}