Government releases Bank Bali audit

JAKARTA (JP): President Abdurrahman Wahid released on Tuesday the full PricewaterhouseCoopers (PwC) audit into transactions in the Bank Bali scandal, meeting a critical requirement for the resumption of international loans to the government.

Coordinating Minister for the Economy, Finance and Industry Kwik Kian Gie presented a copy of the audit to visiting International Monetary Fund Asia Pacific director Hubert Neiss during a news conference crowded by local and foreign reporters.

"I received an instruction from the President this morning to publish the PwC report into Bank Bali," Kwik said, adding that copies of the full audit would be available to the media on Wednesday.

He said the President obtained a copy of the audit from the National Police on Monday evening.

The audit discloses the transfers of funds from the Rp 546 billion 'booty' involved in the scandal to a number of politically well-connected businesspeople, close aides of former president B.J. Habibie and the Golkar party.

Kwik said publication of the PwC report enabled the government to continue its cooperation with the IMF in resolving the country's economic problems.

The IMF's loans, as well as support from the World Bank and other donors, were halted in the middle of September after the previous administration of Habibie declined to release the full audit because of restrictions of the banking secrecy code.

"Everything is now settled. The social and political condition has stabilized. The state budget is no longer a problem," Kwik said.

House of Representatives Speaker Akbar Tandjung, who was furnished with a copy of the audit last month, also announced on Tuesday he would release the audit.

He said the decision was made after considering "the demands of the people" and receiving an official request from the President for the legislature to make the PwC audit available to the public and the government.

Akbar previously ordered a House joint committee to study the audit before deciding whether it should be released. The committee was given until Dec. 15 to make a decision, a period the government argued was too long.

Neiss welcomed the disclosure of the audit, which identifies several influential figures and Habibie aides who allegedly were involved in transactions in the Rp 546 billion payment.

The audit also recommends further investigation of Bank Indonesia Governor Sjahril Sabirin, former finance minister Bambang Subianto and former state minister of the empowerment of state enterprises Tanri Abeng.

"I'm very happy that we can now put the Bank Bali case behind us," Neiss said in the news conference.

Neiss, whose visit is scheduled to last until Friday, is scheduled to meet Abdurrahman and Vice President Megawati Soekarnoputri on Wednesday.

"We'll study the report carefully... and I'm sure that the government will take necessary follow-up measures so that such a case does not recur, and will take legal action," Neiss said.

"With the Bank Bali case behind us, the way is clear for resuming loan (disbursement)." He said a technical team from the IMF was expected to arrive in Jakarta next week to discuss the best way to disburse the loans.

The scandal revolves around the transfer of the Rp 546 billion commission from the bank to a private firm linked to senior officials of the Golkar Party.

The commission was ostensibly provided as payment for services rendered in recouping the equivalent of some $120 million in interbank loans owed by closed banks. However, use of the company's services was unnecessary because the loans were guaranteed by the government.

There have been allegations that the funds were destined for political purposes ahead of last month's presidential election.

Habibie's bid to retain power was severely undermined by the scandal.

The IMF, the World Bank and the Asian Development Bank suspended loan disbursement pending a satisfactory resolution of the scandal, including the publication of the full audit. A summary was released earlier.

The IMF is organizing a $43 billion bailout for Indonesia. The fund has a commitment to provide $12.3 billion, of which some $10 billion has been disbursed.

Kwik denied publication of audit was prompted by pressure from the IMF.

"It's the determination of the government of Abdurrahman Wahid to be transparent."

Kwik said the country was not in urgent need of the IMF's funds and Neiss acknowledged "(Indonesia) is in no emergency to rush (for IMF money)".

He said the government would have to sign a new letter of intent which would be studied by the IMF's board of directors as the basis for new loan disbursement.

Kwik said finalization of the new letter of intent would be completed in the middle of December with a draft ready by Nov. 25.

He said the IMF team would review the fund-sponsored economic programs next week and would meet with pertinent ministers in the following week.

Minister of Finance Bambang Sudibyo said on Tuesday he was optimistic about the outlook for the state budget in the current fiscal year ending in March 31, 2000, on the back of better oil prices and strong tax revenue.

Speaking to reporters following a meeting with other economic ministers, Bambang forecast that the budget deficit in the fiscal year would be about 4 percent of gross domestic product, lower than the initial estimate of 6.87 percent.

He also said the state budget would need about US$1.2 billion in multilateral loans in the second half of the fiscal year.

The figure is much lower than the $4.7 billion pledged by international creditors until March.

Kwik denied media reports that he disagreed with Bambang over the condition of the state budget.

He said his earlier comment that the budget was in a deficit referred to the full year through March 31, 2000, while Bambang's comment covered only the period from April to September. (rei/02/prb)