Jamsostek ordered to help small firms<\/p>\n
JAKARTA (JP): President Soeharto has instructed state-owned
\nsocial insurance firm PT Jamsostek to allocate Rp 2 trillion
\n(US$588 million) of its investment fund to small firms, and
\nprovide an additional $1 trillion for low-cost housing loans.<\/p>\n
Minister of Manpower Abdul Latief, accompanied by Minister of
\nCooperatives and Small Enterprises Subiakto Tjakrawerdaya, said
\nyesterday that Soeharto had instructed them and Minister of
\nIndustry and Trade Tunky Ariwibowo to monitor the allocation.<\/p>\n
Latief said Jamsostek would receive 14 percent in interest per
\nyear from their funds placed in state banks, which would then
\nchannel the funds to small firms at 17 percent -- far lower than
\nthe market rate of 28 percent now.<\/p>\n
\"This is a rescue program aimed at salvaging medium- and
\nsmall-scaled businesses from possible bankruptcy. If these
\nbusinesses are not saved, unemployment will result,\" Latief said.<\/p>\n
He said his office, together with the Ministry of Cooperatives
\nand Small Enterprises and the Ministry of Industry and Trade, had
\nformed a task force to implement the program.<\/p>\n
Small firms that would be prioritized to receive funds would
\nbe those in distribution, export-related and labor-intensive
\nbusinesses, Latief said.<\/p>\n
Subiakto said Latief and he would meet again Wednesday,
\ntogether with executives of state banks and Bank Indonesia
\nofficials, to finalize their decision on what mechanism to use to
\nchannel the funds.<\/p>\n
He reiterated to all parties concerned that they had to make
\nthe program successful as it was Soeharto's order.<\/p>\n
\"The President really cares for the people. Even though he is
\nleaving tomorrow (today), he still called us this morning from
\nhis residence on Jl. Cendana to discuss this particular matter,\"
\nSubiakto said.<\/p>\n
Soeharto is scheduled to leave for Namibia today, after which
\nhe will travel to South Africa and then Canada to attend the Asia
\nPacific Economic Cooperation (APEC) summit.<\/p>\n
In addition to the Rp 2 trillion for small businesses,
\nJamsostek was earlier ordered by the President to deposit Rp 1
\ntrillion in state-owned Bank Tabungan Negara (BTN) at a lower
\nthan prevailing market rate.<\/p>\n
BTN then used the funds for its low-cost housing loans, with
\ninterest rates ranging from 20 percent to 22 percent.<\/p>\n
Jamsostek president Abdillah Nusi said at a hearing with the
\nHouse of Representatives Commission V for manpower and trade that
\nhe had no choice but to say \"Yes, we are ready sir.\"<\/p>\n
Nevertheless, he noted that the insurance firm had distributed
\nits investment funds of some $5 trillion into Bank Indonesia
\nCertificates, certificates of deposit at state banks and private
\nbanks, publicly listed stocks and equity in some firms and land.<\/p>\n
He did not give a description of the percentage of each
\ninvestment vehicle, but said Jamsostek had placed a significant
\namount of funds in private banks, including about Rp 125 billion
\nin five of 16 closed banks.<\/p>\n
The five banks were Bank Harapan Sentosa, Bank Andromeda,
\nAstria Raya Bank, Bank Guna Internasional and Bank Kosagraha
\nSemesta.<\/p>\n
\"We only put our funds in private banks when they had
\n'healthy' certificates from Bank Indonesia. The five closed banks
\nalso had certificates from the central bank when we placed our
\nfunds there. So where is Bank Indonesia's accountability?\" he
\nsaid.<\/p>\n
In addition, he said Jamsostek invested some Rp 250 billion in
\nthe stock market, which carried a potential loss of some Rp 100
\nbillion.<\/p>\n
It collected some Rp 1 trillion in premiums last year. It
\nexpects to take in Rp 1.6 trillion this year, Rp 1.8 trillion
\nnext year and Rp 2.2 trillion in 1999. (09\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jamsostek-ordered-to-help-small-firms-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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