Car, jet projects continue: Soeharto

JAKARTA (JP): President Soeharto said yesterday that the national car project and the plan to develop Indonesia's own jet plane would continue without state funding or assistance.

As a matter of principle both projects must be continued, Minister of Sports and Youth Affairs Hayono Isman quoted the President as saying.

The national car project and the N-2130 jet plane project were singled out by the International Monetary Fund (IMF) to no longer receive state assistance and funding in return for the US$43 billion loan package it organized for Indonesia.

Soeharto announced the decision after signing a letter of intent to the IMF Wednesday, in which he pledged to undertake sweeping economic reforms to lift Indonesia out of its predicament.

The national car project is handled by PT Timor Putra Nasional which is controlled by Soeharto's youngest son Hutomo Mandala Putra. The company has enjoyed massive tax breaks and access to huge credit to distribute Korean-made KIA cars under the Indonesian brand of Timor before manufacturing them locally.

The N-2130 plane is being developed by PT IPTN, the state aircraft manufacturer.

All tax and credit privileges enjoyed by Timor Putra have now been removed, and the government has cut off funding to IPTN.

Hayono said after meeting with the head of state at his Jl. Cendana residence that the government had wanted to start a national car program for sometime, but none of the existing licensed car sole agents had the ability to carry it out until Timor Putra Nasional came along two years ago.

Indonesia must sustain its aircraft manufacturing capability because of a growing domestic demand for planes, still the best mode of transportation for an archipelagic state, he said.

Soeharto, according to Hayono, did not see any problem with the termination of state funding to IPTN.

"If we can't do it, then we can work with foreign parties. China, Australia and Taiwan have expressed interest," he said, hinting that a European plane consortium, the Airbus Industrie, may also possibly be interested in an arrangement with IPTN.

Soeharto denied accusations that Indonesia had succumbed to IMF pressures and that this was a form of colonialism.

"There were no pressures that could be interpreted as economic colonialism," Hayono said. It was a partnership agreement with the IMF, and there was no undue pressure, he added.

Meanwhile, Soeharto's eldest daughter Siti Hardiyanti Rukmana disclosed yesterday that she and her siblings, whose businesses were affected by the IMF package, had been informed before the decision was made.

Mbak Tutut, as she is popularly known, said that the family met a week before the Jan. 14 IMF announcement.

"Father asked whether we were prepared to have some of our projects postponed. We said then that we were ready. No one refused, or objected to the (IMF) agreement," she was quoted by Antara as saying.

"We told him that we were ready for the sake of greater interests, that is the nation and the country.

"This condition will not go on forever. We will continue to work to put the economy back on its normal path," she said.

Some of the IMF reform measures were targeted at the businesses of Soeharto's children.

Hardiyanti has several government contracts to build new toll roads which have now been postponed. One of the 16 commercial banks closed in November in the first round of IMF reforms belonged to Bambang Trihatmodjo, Soeharto's second son.

Hardiyanti was speaking after leading another drive for people to exchange their dollars for rupiah or to donate their gold and jewelry to help the government cope with the crisis.

She took executives from her Citra business group to donate their gold to a counter of Perum Pegadaian, the state-owned pawnshop company, at Bank Indonesia (central bank).

Hardiyanti donated two kilograms of jewelry and gold, Antara said. A total of 9.2 kg of gold was collected in yesterday's campaign which also saw veteran singer Titiek Puspa and actresses Marisa Haqua and Dortje taking part.

Meanwhile, State Minister of Population Haryono Suyono said the government would introduce a credit scheme with an interest rate of 12 percent to help people in poor villages.

Subsidized loans of up to Rp 50 million would be made available to small companies and cooperatives, and up to Rp 2 million to individuals, Haryono said after a meeting with Soeharto.

The funds will be channeled through state-owned banks BRI and BNI. (emb/prb)