Govt and businessmen agree to join forces

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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