Sat, 16 Sep 2000

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)