Internal conflict threatens IBRA revenue target<\/p>\n
JAKARTA (JP): Drastic restructuring measures introduced by the
\nnew leadership of the Indonesian Bank Restructuring Agency (IBRA)
\nto improve the agency's efficiency has left the agency mired in
\ninternal conflict, which analysts say could threaten its ambition
\nto meet 2001 revenue target.<\/p>\n
IBRA chairman I Putu Gede Ary Suta admitted that he faced
\nresistance from people within the agency in his effort to revamp
\nthe organization.<\/p>\n
But he is optimistic that IBRA will be able to meet its
\nrevenue target of Rp 27 trillion (about US$3.1 billion) for this
\nyear.<\/p>\n
\"Clearly some people are offended by what I am doing.<\/p>\n
\"Cash flow-wise I am confident we can raise the Rp 27 trillion
\nby the end of the year,\" he told The Jakarta Post in an interview
\nlast week.<\/p>\n
Since his appointment as IBRA chief by former president
\nAbdurrahman Wahid in late June, Ary Suta has embarked on a
\nmission to boost the agency's efficiency.<\/p>\n
IBRA is in charge of selling assets it took over from the
\nailing banking sector hit by the 1997 economic crisis.<\/p>\n
Controlling some Rp 600 trillion (about $68.72 billion) in
\nassets, IBRA's success in selling them is the key to putting the
\ncountry's economy back on track.<\/p>\n
Ary Suta has moved to streamline IBRA's decision-making
\nprocess, cut the overriding presence of consultants and to
\naccelerate asset sales.<\/p>\n
The restructuring measures will enable the agency to cut its
\nbudget spending to Rp 1.7 trillion this year from the initial
\nbudget allocation of Rp 3.1 trillion, he claimed.<\/p>\n
He did not detail the spending cuts, but said the bulk would
\ncome from slashing the number of consultancy firms working for
\nIBRA.<\/p>\n
He later told a media meeting that he had cut three major
\nconsultancy firms from IBRA's payroll.<\/p>\n
They are state owned consultancy firms PT Danareksa Securities
\nand PT Bahana Securities, and the Indonesian unit of Lehman
\nBrothers Inc.<\/p>\n
Ary Suta accused the three of outsourcing their work to other
\nconsultancy firms, a practice he called unethical and costly.<\/p>\n
Although effective in shoring up public support, analysts
\nwarned, the restructuring introduced by Ary Suta would affect
\nIBRA's ongoing work flow.<\/p>\n
With only some Rp 14 trillion in revenue obtained so far, the
\nagency is under pressure to reach its revenue target of Rp 27
\ntrillion within four months.<\/p>\n
However, Ary Suta dismissed claims that the restructuring had
\nstalled the agency's asset sales and debt restructuring program.<\/p>\n
He said he was speeding up asset sales to meet the revenue
\ntarget, including the sales of eight companies formerly owned by
\nthe Salim Group.<\/p>\n
Among them is publicly listed television broadcasting company
\nPT Indosiar Visual Mandiri. IBRA expects the biggest gain from
\nselling 49 percent of its 57.26 percent stake in the company.<\/p>\n
Banking analyst and former IBRA Ombudsman member, Pradjoto,
\nsaid he had heard that IBRA officials had become demoralized
\nafter Ary Suta took over and had \"centralized\" decision-making.<\/p>\n
\"They (IBRA officials) just abandoned their work and left
\neverything to him (Ary Suta),\" he said.<\/p>\n
\"IBRA should be restructured, but I disagree with Ary Suta's
\nway of centralizing decisions,\" he told the Post.<\/p>\n
IBRA deputy Irwan Siregar was quoted as saying by Bloomberg
\nthat many asset sales and debt restructuring proposals were left
\nuntouched by Ary Suta, a claim the latter refuted.<\/p>\n
\"If there was indeed no work, how is it then that we still
\nreceive money?\" Ary Suta argued.<\/p>\n
Pradjoto added that Ary Suta should have refrained from
\ncriticizing his own men before an open forum.<\/p>\n
Ary Suta must realize that he would not be able to meet the Rp
\n27 trillion revenue target without the full support of IBRA
\nofficials, he said.<\/p>\n
Ary Suta should also realize that as an official installed by
\nthe previous government, he also faces the risk of being dumped
\nby the new government.<\/p>\n
\"It's custom for a new government to place its own people in
\nimportant positions of a bureaucracy,\" he said.<\/p>\n
Pradjoto said it was very likely that individuals within IBRA
\nwould step up attempts to drive Ary Suta out of office.<\/p>\n
But maneuvers like these, he warned, will come at the expense
\nof IBRA revenue.<\/p>\n
\"It's high time that the government decided whether to keep
\nAry Suta or replace him,\" Pradjoto said.(bkm\/jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/internal-conflict-threatens-ibra-revenue-target-1447893297",
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