Asset seizure threat

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