Car, jet projects continue: Soeharto

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)