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