Conflict in Cabinet

Conflict in Cabinet

The decision of the Financial Sector Policy Committee (KKSK)
to accept the proposal of the Indonesian Bank Restructuring
Agency (IBRA) for the extension of the obligers' debt settlement
from four years to ten years has brought on an open conflict
between cabinet members.

At a cabinet meeting on Monday, Head of the National
Development Planning Agency, Kwik Kian Gie, was involved in a
tough debate with State Minister of state-owned Enterprises
Laksamana Sukardi on the need to extend the settlement of bank
shareholders' debts.

Kwik argued that the extension of debt repayment would only
spoil conglomerates with no intention of meeting their financial
obligations. But Laksamana said the policy would benefit the
government.

IBRA Chairman I Putu Gde Ari Suta and Coordinating Minister of
the Economy Dorodjatun Kuntjoro-Jakti backed Laksamana while
Finance Minister Boediono backed Kwik, though not openly.

The conflict became obvious when the two sides spoke to the
media by referring reporters to the International Monetary Fund
(IMF). Kwik, once opposed to the IMF, said that the IMF supported
the cancellation of the decision to extend obligers' debt
settlement.

Minister Dorodjatun denied Kwik's statement and said that the
IMF did not give such a recommendation.

The conglomerates' interest is the source of the conflict.

Some deeply indebted tycoons are still living royally while
they have, in all, repaid Rp 18 trillion, or only 12.85 percent
of their total debts of US$140 trillion.

We hope that the conflict will end soon, so the Cabinet will
be able to focus on the economic recovery program. It is
necessary to pay greater attention to poverty alleviation, while
people still line up for rice and oil.

-- Republika, Jakarta