Economic team 'flirts' with unscrupulous tycoons: Kwik

Economic team 'flirts' with unscrupulous tycoons: Kwik

JAKARTA (JP): Former chief economics minister Kwik Kian Gie
warned here on Friday that there were indications that the
economic team in the new Cabinet had started "flirting" with the
country's "unscrupulous" tycoons.

"There are signs that the government (new economic team) is
starting to flirt with the tycoons," he said during a discussion
gathering on the economy and global capitalism, which was also
participated in by former finance minister Fuad Bawazier.

Kwik pointed out that the recent meetings between the new
economics ministers and the "unscrupulous" tycoons could lead to
certain concessions being made.

He said that while making concessions was normal, there should
be no concessions in respect of the legal consequences of the
banking crimes committed by the tycoons.

The new economic team led by Coordinating Minister for
Economic Affairs Rizal Ramli met recently with the tycoons, who
owe massive debts to the government.

The term "unscrupulous tycoons" refers to the former banking
tycoons who violated the country's bank legal lending limits and
who have been reluctant to repay the debts owed by the banks
which they used to own.

The government injected massive liquidity support between 1998
and 1999 to bail out these banks when confidence in the industry
plunged to its lowest ebb.

The tycoons are mostly well-connected businessmen who are now
accused of having been rent-seekers during the 32-year
authoritarian rule of former president Soeharto.

Kwik has always been a strong critic of these allegedly
unscrupulous tycoons.

Kwik, who is a senior member of the country's largest party,
the Indonesian Democratic Party of Struggle, became the chief
economics minister in President Abdurrahman Wahid's
administration in November 1999, but was ousted in August's major
Cabinet reshuffle.

During his last days in office, Kwik surprised the business
and financial community here when he vowed to revise an earlier
agreement made between the tycoons and the previous
administration of president B.J. Habibie in 1999 to settle the
obligations owed by their banks to the government.

Under the agreement, called the Master of Settlement and
Acquisition Agreement (MSAA), the tycoons pledged some assets to
repay their debts. However, they were to be absolved from
further liable for any remaining debts if the assets turned out
to be worth less than initially valued when they were finally
sold off.

Kwik was clearly annoyed by this agreement.

The problem over the MSAA agreement is to be resolved by a
joint team from the government and the House of Representatives.

Among of the conglomerates which signed the MSAA agreement
were the giant Salim Group which formerly owned the publicly
listed Bank Central Asia (BCA).

Kwik said that he and former finance minister Bambang Sudibyo
were ejected from the Cabinet because they were seen as a threat
to the tycoons.

Kwik also lambasted the government for taking no legal action
so far against the tycoons whose (alleged) crimes had been
uncovered by the previous economic team.

"There has been no action taken so far either by the Attorney
General's Office or the Police. It's still a big zero," he said.

Kwik added that if the government allowed the bad
conglomerates to escape the consequences of their past
wrongdoing, it would give them a chance to once again sideline
the "clean" businesses which have started to take over the
country's economic machine.

"It's sad to see that so many of us are still ignorant about
the tricks used by the small number of bad conglomerates," he
said.

Kwik urged the government not to allow the conglomerates'
tycoon owners to buy back the companies they had already pledged
in repayment of their debts to the government.

He said they should have had to repay the debt in cash in the
first place if they had enough cash.

Junior Minister for the Restructuring of the National Economy
Cacuk Sudarijanto said this week that the economics ministers
were considering allowing the tycoons to buy back their former
companies.(rei)