Be prepared to liberalize financial services: Mar'ie

JAKARTA (JP): Minister of Finance Mar'ie Muhammad said yesterday that Indonesia must be prepared to face the globalization of the world's financial services.

"We have to be ready to face the globalization of financial services and the resulting fiercer competition," he said.

The minister said that all finance-related activities in the country should be improved to enable them to compete in an era of liberalization.

The World Trade Organization is expected to soon sign an accord on the liberalization of the world's financial services, one of three major service sectors left over at the end of the seven-year Uruguay Round of trade negotiations which led to the launching of a new world trade treaty in January.

"The professional skills of those engaged in financial activities should be improved to enable them to compete in the globalized market," the minister said after he and Canadian Secretary of State for the Asia-Pacific Raymond Chan signed a memorandum of understanding on financial cooperation between Indonesia and Canada.

Under the agreement the Canadian government will provide a Can$11.73 million grant to help Indonesia reform its financial activities in such fields as insurance, pension funds and non-tax revenue management.

The minister said that the technical assistance from the Canadian government is expected to help improve professional skills in the country's financial industry.

System

"We don't have to copy systems from other countries but it is necessary for us to learn how to effectively manage our financial services," he said.

The minister said the grant, which will be provided through the Canadian International Development Agency (CIDA), will also be used to finance activities related to the improvement of procedures for non-tax revenue collection.

In his address following the signing of the agreement, Chan said that the grant, which will be provided outside the financial assistance commitment made by the Canadian government during the recent Paris meeting of the Consultative Group on Indonesia, is the first ever bilateral cooperation project between CIDA and the Ministry of Finance of Indonesia.

"Domestic and foreign investments are increasing but to meet the actual resource requirements, additional resources of financing are still needed," he said of Indonesia's economic condition.

He expected that the grant would result in an improved regulatory framework in Indonesia's financial sectors, such as pension funds, insurance and non-tax revenues.(hen)