Asset seizure threat

Sadly, U.S. Ambassador Robert Gelbard is playing with fire for his overt threat to seize Indonesian assets over the OPIC dispute. For those of you who have been living under a rock, State Electricity company (PLN) defaulted on its payments to American energy producer MidAmerican Energy Holdings (formerly known as CalEnergy). MidAmerican turned to their U.S. government's Overseas Private Investment Corp. (OPIC) for insurance and, in turn, received US$290 million. OPIC is now in the midst of negotiations with the Indonesian government in an attempt to be reimbursed for the amount of the insurance, and unfortunately, will have to continue under the uncomfortable circumstances Mr. Gelbard's statements have created.

Being the chief representative of the world's superpower in Jakarta, the Honorable Mr. Gelbard is well aware of the fragility of the Indonesian economy, especially with the recent roller coaster exchange rates and upcoming General Session of the People's Consultative Assembly. His remarks are not only negatively impacting on the economy but are also misinformed and unhelpful in aiming toward a resolution to the dispute.

Here are some facts: * MidAmerican's disputed contract in Dieng and Patuha originated through corruption, collusion and nepotism during the Soeharto era (YLKI, Media Indonesia, March 29, 2000). * The claim that minister Bambang Sudibyo made that Indonesia "would not pay the claims" is erroneous and misleading, since, according to the Ministry of Finance, OPIC has never submitted an invoice to the government of Indonesia. An invoice is standard and necessary for proper processing (finance ministry letter, Kompas, April8, 2000). * MidAmerican (CalEnergy) has defaulted on its payments to local Indonesia contractors for the amount of $40 million. Should the U.S. government expect Indonesia to promptly pay its debts -- now under threat of asset seizure -- why doesn't MidAmerican promptly pay theirs? ("Firm seeks U.S. government help in dispute with CalEnergy", The Jakarta Post, Oct. 1, 1998).

Indonesia remains at a fragile economic crossroad as it tries to steer itself out of the economic crisis and toward a truly functional democracy. We, as Indonesians, look toward the United States as an old ally and friend for moral encouragement and much needed financial support. Mr. Gelbard, having already served the post of highest ranking American official in Jakarta for two years, knows the realities and tremendous obstacles Indonesia faces today. Why, then, does he refuse to let the process play itself out by making public threats to the Indonesian government that -- obvious to any sensible person -- would easily cause a run on the rupiah in international markets?

Mr. Gelbard, during his two years in Jakarta, has time and time again shown himself to be a liability for Indonesia, and as an Indonesian businessman who deals with American businessman on a daily basis, I can no longer ignore the havoc he inflicts upon the already weak local economy.

Therefore, I agree with the recommendation of Mr. Priyo Budi Santoso, Golkar Party member of House of Representatives Commission VIII, that Mr. Gelbard should be made persona non grata and expelled from Indonesia (Indonesian Observer, Dec. 18, 1999).

MARWOTO

Public Relations Dept.

of the Alliance of Victims

of Geothermal Projects (AVGP)

Jakarta