A wise and daring decision

Pak Harto (President Soeharto) made a wise and daring decision in instructing the reimbursement of all funds to the depositors in the recently liquidated banks. It was wise because the government had no legal obligation to reimburse depositors of ailing banks. As (Minister of Finance) Mar'ie Muhammand explained, however, in the case of the 16 banks recently liquidated, the President's view was that formal law is not the only foundation on which people build their lives. For that reason, regardless of what the law says, justice and humanitarian considerations require that the government pays those depositors their money. It was also a daring decision because huge amounts of money will have to be disbursed in a time of severe crisis.

As we see it the current economic crisis has its origin in a loss of confidence in our societal institutions. Government administration cannot proceed when the government is losing the confidence of its own people. It is important, therefore, that confidence is restored at all costs if survival is to be achieved. And confidence has its price. The price in suffering that we now have to pay teaches us not to dwell on problems, much less exploit them. If we hadn't nurtured those ailing banks there would not have been any bank liquidations with widespread bitter effects.

Whatever the case, Soeharto's decision with regard to those liquidated banks provides a solid vehicle for us to increase our credibility, both at home and abroad.

-- Media Indonesia, Jakarta