A long, strange trip

A long, strange trip

Ever since the Indonesian Bank Restructuring Agency (IBRA)
arranged to restructure the debts of a number of large Indonesian
companies such as Texmaco, Tirtamas and Chandra Asri, some
analysts and vested interest groups have expressed
disappointment, even dismay, at the final outcome. Instead of
appreciating, if not applauding IBRA, FSPC and the government for
what appears to be the best under the worst circumstances, they
criticize them for criticism's sake. This will only contribute to
cynicism, negativism and pessimism in an economic environment
which begs for optimism and a positive attitude.

In the detailed and most complicated debt restructuring
undertaken by IBRA from the above cases, they appear to have done
everything possible, feasible and necessary. Legal scrutiny, due
diligence reports by international agencies, no debt reduction,
no employment reduction, ownership majority and control,
management control, financial and budget control are all in
place.

This appears to be far superior in content, form, process and
procedure than anything done in the past, including the Master
Settlement and Acquisition Agreement (MSAA) involving trillions
of rupiah from well-to-do conglomerates. These agreements also
stand out because they are far better placed in terms of
governmental advantage -- present and future -- compared to such
agreements in the U.S., Japan, Korea, Malaysia and Thailand. In
similar cases here, loans were simply written off (e.g. Kumagal
Gumi Co. in Japan) or the company itself was liquidated (e.g.
Sogo), with the government bearing the entire cost.

I think it is time that we in Indonesia allow the government
and its agencies to perform their jobs at the fastest pace
possible, with only objective feedback coming from the analysts
and interested quarters. Subjective criticism and over-reactive
statements will have the inevitable effect of paralyzing their
work.

Indonesia has traveled 40 months into the crisis and even at
this stage, if we tend to politicize everything, we may end up
nowhere. Our analysts/economists also should compare events in
our neighboring countries, not excluding India and China, as to
what they have done and are doing with such loan restructurings.
It would even be worthwhile for a team of economists, editors and
analysts, and even politicians like Mr. Laksamana Sukardi and Mr.
Kwik Kian Gie, to visit some of our neighboring countries such as
Korea, Japan and Malaysia to see for themselves what is happening
there in resolving such loan restructurings, which will help us
to devise more appropriate and acceptable formulas here. A
journey toward light is definitely better than staying in
darkness. Let us travel together.

S.S. ABDUL KHADER

Jakarta