Foundations' funds

Foundations' funds

From Republika

We were startled by a statement made by a former vice
president, Sudharmono, that the funds of four foundations led by
former president Soeharto, amounting to Rp 2.4 billion, were
deemed too insignificant to hand over to the government. In the
present critical economic situation, such a statement is, in my
opinion, out of place, considering that life for Indonesians has
become increasingly difficult.

As consumers, people of the middle and lower classes must
spend twice the amount for food staples compared to the time
before the crisis. Small and medium-scale businesses are under
pressure due to lack of working capital as a result of price
increases of raw materials, fuel and spare parts of their
production equipment, and purchases must be made in cash.

Amid the ongoing crisis, in which officials and experts are
too absorbed in discussions and debates, bank loans have stopped.
In other words, banks are semiparalyzed because they only receive
funds but do not issue loans. This is because the government
(monetary authority) applies extra-high interest rates for Bank
Indonesia promissory notes (58 percent). Bank deposits have
interest rates as high as 60 percent to 70 percent. If credit is
given, what would the interest rate be? It is not wrong to say
that the business world is at a standstill. Businesspeople have
to cope with strangling interest rates.

In these conditions, we think Rp 2.4 billion is a very
significant amount for the government, provided it is channeled
to push and to expand the activities of the people's economy
sector (small and medium-scale businesses). It should not be
given as grants but as loans (micro, small and medium), giving
priority to productive businesses, especially those which yield
export commodities, import substitutes and domestic primary need
products.

The statement that the amount is of no consequence is not
right. It is very valuable for those who need funds.

SAIDI MALIK

Surabaya, East Java