Govt and businessmen agree to join forces

JAKARTA (JP): Minister of Finance Mar'ie Muhammad and prominent local business leaders agreed yesterday to join forces to restore foreign investors' confidence in the country's economy and currency.

Mar'ie said, after meeting with dozens of business leaders at his office, that the government would also take measures to revive bruised local stock markets.

He said he welcomed a Indonesian Chamber of Commerce and Industry (Kadin) proposal to join forces with him on visits to Washington and New York next week.

"In an effort to restore confidence, we, the government, will explain current developments and policy, while the business people can explain the situation of businesses," Mar'ie said after the meeting.

Business leaders attending the meeting included Mochtar Riady and James T. Riady of the Lippo Group, Ciputra of the Ciputra Group, Sofjan Wanandi of the Gemala Group, Sukmawati Widjaja of the Sinar Mas Group and Kadin chairman Aburizal Bakrie.

Mar'ie is scheduled to be in the two cities from Dec. 10 to Dec. 12, to meet with World Bank and International Monetary Fund officials, U.S. and European fund managers, and commercial banks.

Mar'ie stressed the importance of restoring foreign investors' confidence so as to attract their capital to revive Indonesia's economy.

In an effort to attract foreign portfolio investment, Mar'ie said, the government was preparing measures to strengthen local stock markets.

"I will announce them after my trip to the United States. The measures are basically to strengthen our capital market in line with international standards," he said.

Aburizal, also chairman of the Bakrie Group, said Kadin had formed a special team to accompany Mar'ie on his United States roadshow.

The team includes Sofjan Wanandi, Sukamdani Sahid Gitosardjono of the Sahid Group, Sukmawati Widjaja, economist Sjahrir and Aburizal.

Aburizal said the trip was aimed not only at restoring investor confidence in the economy but also to seek rollover facilities from foreign creditors for local corporations' maturing foreign debts.

"The government and the private sector are now of the same opinion that we should share the responsibility for (dealing with) the current crisis.

"So, we need to coordinate and take joint action to deal with the crisis, including on private sector debts," he said.

The public generally believe that the business community and the minister of finance have been increasingly at odds since the crisis broke out in July.

The minister has repeatedly said that the government will not bail out private sector debts, although it will help lobby foreign creditors to rollover their loans to Indonesian corporations.

Bank Indonesia said about 40 percent of short-term private foreign debts could probably be rolled over, following the finance minister's recent lobbying trip to Japan.

Aburizal said he had had assurance from Bank Indonesia's managing director, Paul Soetopo Tjokronegoro -- who also attended yesterday's meeting -- that the central bank would supply more liquidity to the market.

"Pak Paul promised to add more liquidity to the market to fuel business but warned that it should not be used to speculate on the U.S. dollar."

He said the central bank would summon bankers next week to discuss the new supply of rupiah into the market.

An easing of rupiah liquidity would not contribute significantly to the weakening of the rupiah because the pressure on it came mostly from excessive corporate dollar demand, he said.

To ease pressure on the rupiah, he suggested the central bank provide dollar loans through swap facilities to local corporations in need of dollars to repay their due debts. (rid)

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