Government vows to honor international business contracts
Government vows to honor international business contracts
JAKARTA (JP): President Abdurrahman Wahid reasserted on Monday
that the government remained committed to honoring its
international business deals, but said contracts acquired through
corruption in the past would have to be reviewed.
"Whatever comes out of the regional autonomy plan, we should
not break our international commitments, but we ask the companies
to renegotiate their contracts because (some) contracts were
acquired in the past through corruption, cronyism and nepotism,"
Abdurrahman told a media conference after presiding over the
first of regular Monday meetings of his economics team at Bina
Graha presidential office.
The meeting was attended by, among others, Vice President
Megawati Soekarnoputri, Coordinating Minister for Economy,
Finance and Industry Kwik Kian Gie, Minister of Forestry and
Plantations Nur Mahmudi Ismail, Minister of Communications Agum
Gumelar and head of the State Logistics Agency Rizal Ramli.
The President was responding to a question about the months-
long tax dispute pitting gold mining company PT Newmont Minahasa
Raya against a local government in North Sulawesi.
"We have to be steadfast to this principle (of honoring
international contracts), otherwise we will not be respected and
nobody would want to invest here," Gus Dur, as the President is
also called, said.
In the wake of a demand for a review of the mining concession
awarded to PT Freeport Indonesia several months ago, Abdurrahman
confirmed that Indonesia would respect all international
contracts it had endorsed.
Foreign investors have raised concerns about the country's
volatile security climate and the uncertainty over the
implementation of the new law on regional autonomy which is
expected to take effect starting from Jan. 1, 2001.
"That's why Pak Sofyan Wanandi says that real foreign
investment will only start to take place early next year," Gus
Dur said, referring to the chairman of the Indonesian Business
Council.
Earlier, Kwik expressed optimism that the International
Monetary Fund (IMF) would release the next US$400 million tranche
to Indonesia at the beginning of June.
"Ideally, if the IMF executive board meets on May 30, the fund
will be disbursed June 1 or June 2," Kwik announced before the
meeting.
The government and the IMF have agreed in principle on a new
letter of intent, which states the government's future economic
policies. The letter has yet to be signed.
The letter is expected to pave the way for the disbursement of
the next loan to the country.
The IMF was originally scheduled to release the loan in early
April. Disbursement has been put on hold, however, due to the
government's failure to implement key economic reform measures on
time.
Kwik said that he would "pay a courtesy call" on IMF
headquarters later this month. (byg/prb)