Firms told not to rely much on govt's help

Firms told not to rely much on govt's help

JAKARTA (JP): The private sector should not rely much on the
government's help in coping with their mounting offshore debts, a
former senior minister said here yesterday.

Radius Prawiro, recently assigned by President Soeharto to
head a task force to assist the private sector in negotiating
with creditors, said Indonesian companies should not expect
protection or a bailout from the government.

Private companies should, instead, take restructuring measures
to show creditors they had a strong commitment to handle their
debts, he said.

Business reforms which would allow them to reduce imports and
expand exports and limit their investment expansion, especially
in sectors needing foreign exchange reserves, was much needed to
enable them to ride out the crisis, said Radius, former minister
of finance from 1983 to 1988 and coordinating minister for
economy and finance from 1988 to 1993.

"I call on entrepreneurs, if they want to be strong, not to
dream of getting subsidies, protection, special treatment or
facilities from the government, similar to what they had received
in the past," Radius said after meeting with Soeharto at his
residence on Jl. Cendana, Central Jakarta.

The task force, appointed by Soeharto last week, includes
Radius, the chief executive officer of the Salim Group, Anthony
Salim, the chairman of the Argo Manunggal Group, The Nin King,
and the chief of the Gobel electronics group, Rachmat Gobel.

"What is important is that we have strong goodwill to resolve
our problems (debts) and our foreign creditors must also know it.
We must be transparent to them, we must show them everything they
want to see (from the companies)," said Radius.

"The government will help the private sector in dealing with
the foreign debt. We'll try to find a way we can help it.
However, a final solution will heavily depend on the private
sector itself," Radius said.

Radius also quoted Soeharto as criticizing what he called
inaccurate reports of the country's foreign debt which could
damage government efforts to resolve its ailing economy.

Citing an Indosuez report which put Indonesia's foreign debt
at US$200 billion, the President said such irresponsible reports
could severely worsen the country's credibility in the
international market.

The country's foreign debt was $118 billion as of September,
including $65.6 billion owed by 220 private companies, Radius
said.

If commercial papers held by foreigners were included, the
amount would increase by another $15.3 billion, he added.

"Based on a joint survey with the International Monetary Fund,
our offshore debt is $15.3 billion in the form of commercial
papers, convertible bonds and promissory notes," he said.

Radius, also former governor of the central bank from 1966 to
1973 and minister of trade from 1973 to 1983, revealed that his
team would initially assist about 50 private companies.

"I will help the companies resolve their debts. This mission
is related to the government and the Monetary Council because if
they do not repay their debts, the companies will continue to
receive lower ratings from Standard & Poor's, for instance, which
would also affect Indonesia's rating," Radius said when asked
about his team's relationship with the Monetary Council.

When asked how long his team would work, Radius answered
jokingly: "If you ask my wife, she'll answer, 'As soon as
possible.'" (prb)