Conference on debt begins
Conference on debt begins
JAKARTA (JP): Approximately 1,200 participants representing
mostly local debtors and foreign creditors attended the Jakarta
Initiative conference, which opened on Monday to restart stalled
negotiations on massive corporate debts.
Coordinating Minister for Economy, Finance and Industry
Ginandjar Kartasasmita, who opened the two-day gathering,
reaffirmed the importance of the corporate debt restructuring for
the recovery of the crisis-hit economy.
"We will not be able to generate the jobs we need, alleviate
poverty, expand our national output or generate fiscal balance
until the engine of growth in our economy, its private sector, is
working again. This means that the companies which employ our
people, provide our exports and invest for our future have to be
put on a sound long-term financial footing," he said.
He said that proper and accurate information must be shared
between debtors and creditors to reach a restructuring agreement.
"When they work with asymmetric information, it can undermine
the trust that is needed for agreements to be reached," he added.
Finance Minister Bambang Subianto also stressed in his speech
the need for transparency on the part of local debtors.
He said the government had abolished regulatory hurdles and
provided incentives to promote corporate restructuring.
The Jakarta Initiative corporate restructuring program was
launched last month to encourage debtors and creditors to meet at
the negotiation table to hammer out an out-of-court debt
settlement.
The country's private sector overseas debt as of April this
year amounted to US$67 billion, including $4 billion in the form
of securities and derivatives. Of the total, $32 billion is due
this year.
The Jakarta Initiative also promotes an out-of-court
settlement for the more than Rp 600 trillion in debts owed by the
corporate sector to domestic commercial banks.
The Jakarta Initiative Task Force chairman, Jusuf Anwar, said
the large participation in the conference indicated a positive
attitude both on the part of the creditors and debtors to solve
the debt problem through corporate restructuring.
He said the number of participants was three times more than
the original target.
He said 35 percent of the conference participants represented
foreign creditors, 35 percent represented local debtors and the
remainder represented local bankers, lawyers, auditors,
restructuring consultants and government officials.
However, head of the World Bank's corporate restructuring and
governance group, Gerald Meyerman, warned people not to expect
too much too soon from the conference.
"Everyone needs to recognize that this is a very complex
process. The Jakarta Initiative conference represents an
important first step but it's unrealistic to expect large-scale
results on restructuring until the first quarter of 1999," he
said.
But he added, "With so many participants registered, it is
very clear that all of us have made an impressive start."
Conference speakers included chairman of the country's private
debt team, Radius Prawiro; World Bank country director in
Jakarta, Dennis de Tray; the Lippo Group's deputy chairman, James
Riady; the Indonesian Chamber of Commerce chairman, Aburizal
Bakrie; the National Private Banks Association chairman, Gunarni
Soeworo; John Knight of Chase Manhattan Bank; Wolfgang Topp of
Deutsche Bank; Nitin Bajtai of Morgan Stanley Dean Witter; and
Victor Khoslal of Cerberus Capital Management.
The second-day meeting on Tuesday will discuss, in closed-door
sessions, sectoral developments and will hopefully see early
starts in individual talks between debtors and creditors. (rei)