Foreign joint ventures urged to help small firms

JAKARTA (JP): Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya yesterday urged foreign joint venture companies to forge partnerships with small and medium-size local firms.

The minister said the partnerships would narrow the widening disparity between big and small domestic companies.

"Their involvement in the government-sponsored partnership program is much needed," the minister said, adding that the Jimbaran group's partnership program was insufficient given the many small and medium-size local firms.

He said helping small and medium-size companies was not only the responsibility of the government or the Jimbaran group, which was developed after a meeting of businesspeople in Jimbaran, Bali, last year.

The country's top businesspeople, at Jimbaran, pledged to boost business partnerships with small and medium-size companies, and provide funds and management to weak companies.

Earlier reports said the Jimbaran group would be dissolved. The group comprises representatives of more than 45 large business groups, including the Astra, Bakrie, Barito, Ciputra, Dharmala, Djajanti, Gemala, Humpuss, Lippo, Napan, Salim, Soedarpo and Sandratex groups.

Jimbaran group spokesman Sofyan Wanandi announced yesterday the minister had said these reports were unfounded.

The minister said, "We do not really want to dissolve the group, but expand its membership to foreign joint (venture) companies."

He said he and Sofyan would personally approach the foreign joint ventures to join the group.

The Jimbaran group has given financial assistance and contracts worth Rp 2.1 trillion (US$889 million) to small and medium-size companies since its establishment in late 1995, the minister said.

Sofyan said the group provided the financial assistance and contracts in cooperation with business associations and local chapters of the Indonesian Chamber of Commerce and Industry.

He said the group's assistance and partnership program was launched because of moral suasion from the government.

"This is a matter of heeding the appeal. Therefore nobody should not feel compelled to join the program," he said.

President Soeharto has issued several "appeals" to help narrow the increasing disparity between big and small companies. Many people blame this disparity on big companies' -- mostly owned by Chinese businessmen -- domination of the local economy.

The government has appealed to publicly listed companies to sell 1 percent of their shares to cooperatives at their face values or for less than half their market prices. Entrepreneurs or companies with an annual income of at least Rp 100 million ($42,375) were asked to provide at least 2 percent of their annual earnings to weak companies.

The government also requires state companies to set aside 1 percent of their profits for subsidized loans to weak companies. (hen)