BSM to help government boost trade with Iraq
BSM to help government boost trade with Iraq
JAKARTA (JP): Bank Syariah Mandiri (BSM) and the Indonesian
Chamber of Commerce and Industry (KADIN) agreed here on Friday to
help promote bilateral trade with Iraq.
The bank's president, Nurdin Hasibuan, said BSM, under the
agreement, would provide export financing facilities to companies
willing to sell their goods to the Middle East country.
"We are ready to help local exporters sell their products to
Iraq," he said at a media conference.
As part of the United Nations-backed food-for-oil program to
Iraq, Indonesia is entitled to sell US$500 million worth of food
products and other merchandise to Iraq for every six months. In
return, Iraq would pay Indonesia with crude oil, according to
Nurdin.
Besides food, he said, there were also medicines, electronics
and mining equipment that could be exported to Iraq by Indonesian
exporters.
BSM, which is wholly owned by state Bank Mandiri, began
operations late last year as the second Islamic bank in the
country, and bases its activities on profit-sharing, not on
interest payments as adopted by conventional banks.
Muchrim Hakim from KADIN said there were 120 companies on the
list who were ready to join the food-for-oil program using BSM
export financing facility.
"We will work on assisting all these companies so we can meet
the $500 million portion given to Indonesia," he said.
Indonesia's exports to Iraq totaled $45.6 million in 1998, or
less than one-hundredth percent of the country's total export
figure, according official data.
Imports from Iraq to Indonesia amounted to $47,000 in 1998, a
significant fall from $36 million the previous year.
BSM currently has about Rp 450 billion in total assets with a
equity of Rp 350 billion, according to Nurdin.
The bank has so far collected Rp 10 billion of public deposit
funds.
Nurdin said the bank had targeted to collect up to Rp 100
billion in deposit funds from the public during the year 2000.
BSM, before its transformation into a Syariah bank, was the
commercial Bank Susila Bhakti, said Nurdin. (udi)