Businesspeople vow to back govt reforms

Businesspeople vow to back govt reforms

JAKARTA (JP): Indonesian business leaders have pledged their
support for any reform measures to be taken by the government to
cope with the country's monetary crisis.

"There's no need to blame each other again, we have to be
responsible and take part in the restructuring of our economy,"
Sofyan Wanandi, chairman of the Gemala Group, said after a
meeting between Indonesian business leaders and executives of
Bank Indonesia, the central bank, Tuesday night.

About 120 local tycoons and leading entrepreneurs met with
Bank Indonesia Governor J. Soedradjad Djiwandono to show their
support for the revival of the Indonesian economy.

The chairman of the Indonesian Chamber of Commerce and
Industry, Aburizal Bakrie, said the chamber wanted to show the
government that the private sector would unite in efforts to
restore confidence in the Indonesian economy.

Businesspeople said they would back any decision resulting
from government talks with the International Monetary Fund (IMF)
to reform the economy.

"The business sector waits eagerly for the success of the
government in its talks with the IMF," Aburizal said.

President Soeharto is scheduled to meet with IMF managing
director Michel Camdessus today, in which Camdessus is expected
to finalize further details of the economic reforms.

Camdessus' visit is one of a series of important visits from
IMF and American government officials this week to persuade the
Indonesian government to stick to economic reforms agreed to in
October in exchange for the IMF-arranged bailout program to cope
with the country's ailing economy.

IMF first deputy managing director Stanley Fischer arrived in
Indonesia earlier this week, followed by U.S. Deputy Treasury
Secretary Lawrence Summers.

Indonesia has become the focal point of concerns by the IMF,
the United States, and other large countries, after the rupiah
crashed last week to over Rp 10,000, an over 70 percent drop in
value since July, on concerns that the government might backslide
on its commitment to reform measures.

Sofyan said the private sector was waiting for the result of
the meeting to see what kind of action plan it would take to
support the reforms.

"We are going to use the momentum of the IMF visit to show the
unity of the private sector in helping the government cope with
the crisis," Sofyan said.

Aburizal said the government needed to clearly disclose what
reform measures it would take after talks with Camdessus.

"We need the government to detail the measures to be taken,"
Aburizal said.

Soedradjad

Soedradjad said Tuesday he received the private sector's
support with delight.

"The assessment and willingness of the business sector to
support the government and to find a way out of this turmoil will
help us not only survive but also improve ourselves," he said.

He said both the government and the business sector would work
to restore confidence in the rupiah by encouraging exporters to
exchange their dollar holdings for rupiah.

The government would provide new foreign exchange swap
facilities for exporting companies to replace existing ones.

"We expect to complete it within one or two days, if technical
matters are settled and if owners of the exporting companies
approve the new facilities," Soedradjad said.

He said the government had worked with exporters on technical
matters of the new facilities.

"But we have to be careful so we aren't accused of subsidizing
exporters. We have to come up with a balanced system that is
acceptable by international rules and at the same time attractive
to the private sector," he said.

Soedradjad said exporters kept their dollar holdings because
there was uncertainty in the rupiah. Companies had to have
dollars to import some materials and repay their foreign loans.

He said existing swap facilities for exporters were not
attractive enough so exporters still preferred to hold on to
their dollars.

Indonesia's imports were about US$3.7 billion a month, he
said.

Soedradjad estimated the value of transactions in the foreign
exchange market totaled about $8 billion a day.

Because there was a slowdown in the flow of dollars, and
exporters were still holding on to their dollars, the value of
transactions was declining, he said.

Asked why the rupiah continued to sink despite the "love
rupiah" campaign that was recently launched, Soedradjad said the
campaign was a morale movement.

"In market reality, it may not have any significant impact,
because even if the rupiah strengthens here, it may fall in the
London and New York markets," he said.

"This movement is symbolic to show that we are in this
together, but if we all do this together, there may be
improvement," he said.

Business and government leaders and public figures have been
endorsing the "love rupiah" campaign by publicly exchanging a
large amount of dollars for rupiah at local banks this week.

Soedradjad said there was no need to continuously question the
drop of the rupiah. "It's like people who keep asking you what
grade you are in at school every month, when they know that you
are still in the same grade."

Sofyan contributed the rupiah's wild fluctuation to
speculation on the ongoing negotiations between the IMF and the
government.

"I believe once there is a clear outcome of the meeting, the
rupiah will regain strength, especially after the market sees the
commitment of the IMF and other large countries to help us," he
said.

Tuesday night's meeting was attended by owner and founder of
the Salim Group Lim Sioe Liong, property mogul Ciputra, father
and son tycoons Mochtar and James T. Riadi of the Lippo Group,
and Prayogo Pangestu of the Barito Group. (das)