Government puts an end to decision-making role of FSPC
Government puts an end to decision-making role of FSPC
JAKARTA (JP): The government ended on Wednesday the decision-
making role of the Financial Sector Policy Committee (FSPC),
Coordinating Minister for the Economy Burhanuddin Abdullah said.
Burhanuddin said that the FSPC would return to its original
function of providing policy recommendations on major corporate
debt restructuring programs to the finance minister.
Speaking to reporters following a Cabinet meeting on the
economy, he said that during the past year, the FSPC had deviated
from its original function.
The FSPC groups several senior economic ministers led by the
coordinating minister for the economy.
But when the committee was chaired by Rizal Ramli, the
previous chief economic minister and current finance minister
following the recent Cabinet reshuffle, it had been strongly
criticized for its strong intervention in the Indonesian Bank
Restructuring Agency (IBRA), which is mandated to restructure a
huge amount of bank nonperforming loans (NPLs).
Experts have said that the strong intervention by the FSPC had
partly contributed to the slow progress in the restructuring work
at IBRA, a unit of the finance ministry.
Legislators have recently demanded the government either
dissolve the FSPC or limit its function.
The powerful role of the FSPC had also become the center of a
dispute between Rizal and the former finance minister Prijadi
Praptosuhardjo, who had often refused to endorse the corporate
restructuring decisions taken by the committee.
One of the high profile cases is the restructuring deal made
by the FSPC in April on the debt of petrochemical giant PT
Chandra Asri owed to Japan's Marubeni Corp., which was rejected
by Prijadi and IBRA.
An executive of the FSPC recently said that the finance
ministry under Prijadi had declined to implement some 140
decisions made by the committee.
Meanwhile, IBRA's new chairman I Putu Ary Suta said that he
planned to expedite the decision-making process within IBRA to
ensure that it could achieve its mandate by February 2004, when
the agency would be dissolved.
"If the work flow continues in the old manner, we may have
difficulties in meeting the target," Ary Suta said.
IBRA, established in January, 1998, currently controls various
banking assets worth around Rp 540 trillion. The agency is
mandated to restructure the assets and sell them to the market to
raise cash to help finance the state budget deficit.
But finance minister Rizal said earlier this week that the
agency had so far only managed to divest around 20 percent of the
total assets.
President Abdurrahman Wahid appointed Ary Suta as the new
chairman of IBRA early this week, replacing Edwin Gerungan, who
had gained a reputation for his strong integrity during his
seven-month term. (rei/dja)