Enterpreneurs told to honor debts

JAKARTA (JP): A cabinet minister called yesterday for the country's private entrepreneurs to honor their domestic and international debts and service them on time despite their financial hardships.

Minister of Transmigration Siswono Yudohusodo warned that any attempt to avoid responsibility would tarnish the country's image in international financial markets.

"Do not expect the government to be responsible for their (private sector) debts. (Such an expectation) is not reasonable at all," said Siswono after meeting with Vice President Try Sutrisno at Merdeka Selatan Palace.

Siswono was a successful businessman before entering cabinet. He founded the widely diversified Bangun Tjipta Sarana Group and led his company for nearly 25 years before his appointment as state minister for public housing from 1988 to 1993. In 1993 he was appointed to his current position.

"They must show their maximum efforts to repay their debts, if necessary by selling their assets. Such measures will maintain their own credibility," he said.

Minister of Finance Mar'ie Muhammad said in September the country's foreign debts were US$117 billion. Sixty-five billion of this amount was owed by the private sector, including both short-term and long-term debts.

Siswono categorized Indonesian entrepreneurs into four types according to their commitment to repaying their debts.

"First, there are those who want to repay their debts and are able to do so. Secondly, those who want to repay their debts but are not able to. Thirdly, those who are able but not willing to repay, and the worst (fourth) are those who are neither able nor willing to repay their debts," he said.

The minister agreed with President Soeharto's recent plan to offer higher interest rates on U.S. banknotes than are offered offshore. However, he said, nationals banks should offer much more attractive incentives to woo money that is being saved abroad, home.

"If Singapore's banks offer 6.7 percent interest and our banks only offer 8 percent, I think they (depositors) will prefer to leave their money there. But if our banks offered 10 percent, depositors might be interested in bringing their money home," he said.

Siswono said entrepreneurs were very sensitive about profit and the security of their investments.

"Some of my Chinese-descent friends told me only gamblers want to think about profit and ignore safety, and only the ministry of social services does not think about profit," he said.

The ongoing monetary crisis has prompted calls from various parties, including President Soeharto himself, for public austerity. Including in the suggested moves was pay cut for civil servants or high-ranking officials.

Siswono, however, disagreed with the suggestion to cut the salaries of civil servants as an effort to overcome the monetary crisis, saying that their salaries are in fact already insufficient.

"The one thing that we should do is to carry out retrenchment," he said. (prb)