Export funding firm to operate promptly
JAKARTA (JP): The government is confident the planned export funding agency will be operational this year, despite some difficulties in its establishment, a senior official at the Ministry of Industry and Trade said Saturday.
Director General of International Trade Djoko Moeljono said the agency has to begin operations as soon as possible, saying it is badly needed to revitalize the country's export activities.
"We have found that setting up the agency is not as easy as we thought. We have to have long discussions before making it a reality," he said at the sidelines of a plenary meeting of the Indonesian Exporters Association (GPEI).
Djoko said the agency should begin operating before April, because a delay would create more problems for the country's exporters.
He admitted that difficulties in establishing the export funding agency were related to procedural matters, saying a new regulation is needed to support the operation of the agency as the existing banking laws do not cover such a financing agency.
"We are currently preparing the draft of the bill," he said.
The government initially aimed to set up an export financing agency in early March. It was planned that Bank PDFCI, one of the private banks nationalized last year, would be transformed into an export financing agency.
However, Minister of Industry and Trade Rahardi Ramelan said earlier this month the government had canceled the plan to use Bank PDFCI and that it would instead set up a new bank as an export funding agency.
Djoko said that using an existing bank would be more time- consuming and complicated than establishing a new one. "Besides, after assessing the track record of the existing banks, none of them are qualified enough to operate as an export funding agency."
The delay in the agency's establishment has raised complaints from export-oriented companies, which have said that any further delay would ruin the country's foreign trade altogether.
Djoko said the export financing agency, designed to boost declining exports, would operate solely in export activities.
The agency is to be financed by the government, which will hold the majority stake, and by private investors. It will also receive funding from foreign aid channeled through the government, and the issuance of commercial papers to raise public funds, he said.
Initially, the financing agency will provide subsidized, pre- shipment working capital and export credit for exporters in financial hardship to maintain their production.
It will provide guaranteed short-term export financing and export insurance, as well as operating as an export information and data center.
The economic turmoil has eroded international trust in Indonesia's banks and made it almost impossible for companies to obtain letters of credit from local banks to import necessary raw materials. (gis)