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