RI needs creative strategy to draw investors: Miranda<\/p>\n
JAKARTA (JP): Innovative breakthroughs are needed to attract
\nbadly needed capital to right the floundering economy, Bank
\nIndonesia director Miranda S. Gultom said yesterday.<\/p>\n
Mergers, acquisitions and consolidations of private businesses
\nand privatization of state firms should also be encouraged to
\nlift the country out of its economic woes, she said.<\/p>\n
\"Indonesia currently needs a huge amount of capital to finance
\nvarious programs like banking restructuring with its guarantee
\nscheme and a huge amount of foreign exchange to tackle corporate
\nand bank offshore debts,\" she told a luncheon hosted by the
\nCapital Market Society.<\/p>\n
\"In this context, we need innovative breakthroughs to attract
\na significant amount of capital inflows to Indonesia.\"<\/p>\n
She advised the government to revise capital market
\nregulations, offer tax incentives and create banking flexibility
\nto facilitate corporate restructuring.<\/p>\n
The Capital Market Supervisory Agency should consider allowing
\ncompanies conducting prospective infrastructure projects to raise
\nfunds through local stock markets, Miranda said, even when they
\nhad not booked profits in the last consecutive three years, which
\nis required by existing rules.<\/p>\n
She listed these infrastructure projects as toll roads,
\ncommercial ports and telecommunications.<\/p>\n
\"The government could also offer tax incentives as a sweetener
\nto attract foreign capital to reenter Indonesia.\"<\/p>\n
Miranda added the government was currently preparing the
\nissuance of government bonds and the privatization of state firms
\nto raise more foreign exchange.<\/p>\n
\"Privatization of state firms could attract more inflow of
\nforeign capital, which is so scarce now due to the remaining low
\nconfidence from the international community on Indonesia's
\neconomy, especially on companies' health.\"<\/p>\n
Miranda warned the privatization of state firms would not
\nbenefit the country much unless their finance, management and
\norganization were restructured in a transparent manner and
\naccording to international standards.<\/p>\n
She urged private businesses to pursue corporate restructuring
\nto weather the crisis.<\/p>\n
\"In the current crisis, national corporate restructuring
\nthrough mergers, acquisitions and consolidations should be
\nencouraged as it is one good alternative to create a strong
\nnational industrial structure for the 21st century.\"<\/p>\n
She said the measures were not new to local firms. In the last
\ntwo years alone, she recorded 33 acquisition deals by Indonesian
\nenterprises of Singaporean firms.<\/p>\n
In the banking sector, 36 banks had undergone mergers,
\nacquisitions and consolidations prior to the 1988 banking
\nderegulation. In the past 10 years, 16 banks have undergone this
\nrestructuring.<\/p>\n
Miranda said the process would allow companies to create good
\nconditioning for its strategic business maneuvers in the future
\nand pool resources to increase their leverage and improve
\ncompetitiveness.<\/p>\n
Negative implications of corporate restructuring could
\nsurface, she warned, such as layoffs, hostile takeovers, the
\ncreation of monopolies and speculation by corporate raiders.<\/p>\n
These should be anticipated beforehand to allow for
\npreparation for if and when they emerged, she added.<\/p>\n
Miranda said the central bank had been working hard to
\nstabilize the rupiah's exchange rate and restructure the banking
\nsystem to facilitate corporate restructuring.<\/p>\n
In the near future, she said, the Indonesian Bank
\nRestructuring Agency (IBRA) would announce the results of its
\nworks in restructuring troubled banks.<\/p>\n
\"With this IBRA, we want to show that we mean business. We
\ndon't want to talk only or just show our good intentions because
\nin this situation of diminishing public confidence, people need
\nreal action.\" (aly\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-needs-creative-strategy-to-draw-investors-miranda-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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