Govt sets up new bank to back exports
Govt sets up new bank to back exports
JAKARTA (JP): Minister of Industry and Trade Rahardi Ramelan
said on Thursday the government would open a bank next month to
finance exports.
Rahardi said the legal basis for the establishment of the
special financing agency was signed by President B.J. Habibie on
Tuesday.
Under the regulation, the agency, to be named Bank Ekspor
Indonesia, will begin operations with an initial paid-up capital
of Rp 3 trillion (about US$375 million).
"The agency will start its operations next month," Rahardi
said.
He said private companies would be allowed to hold shares in
the bank, but the government would be the majority shareholder.
Rahardi said the bank would not raise funds from the public,
adding that the bank's funding would mainly come from bilateral
and multilateral foreign financial institutions, including the
Japan Export Import Bank, the World Bank and the Asian
Development Bank.
The government has secured $1 billion in standing loans from
the Japan Export Import Bank to finance the new bank's
operations, he said.
The government initially planned to transform Bank PDFCI, one
of the private banks nationalized last year, into an export
financing agency.
The government canceled this plan, saying that establishing a
new bank would be more effective.
Export companies have complained about the delay in the
establishment of the agency, saying any further delays would
completely destroy the country's foreign trade.
The export financing agency is designed to provide financial
assistance to Indonesian exporters who have been hurt by the
collapse of the country's banking industry.
Because of low international confidence in the local banking
system, letters of credit issued by local banks are often
rejected by foreign banks.
The government attempted to help export companies by
guaranteeing all letters of credit issued by certain local banks.
However, exporters still have had to make deposits before being
allowed to open letters of credit at these local banks.
"The agency will help exporters obtain letters of credit to
import raw materials and also boost their working capital,"
Rahardi said.
Export tax
Rahardi also criticized analysts and export associations who
questioned his plan to impose export taxes on primary
agricultural products, saying the plan was merely an idea to help
encourage the local downstream industry and boost the export of
more value-added secondary products.
He said the prices of primary products such as coffee and
cocoa always fluctuated sharply, while the prices of processed
commodities were relatively stable.
"We have been known as exporters of primary products since the
colonial era. Now it is the time for us to develop an
agroindustry which will produce more value-added products and
create more job opportunities for our workforce," he said.
"But it is still an idea which needs discussion. So please
give me input," he said.
Export associations, including the Association of Indonesian
Coffee Exporters and the Indonesian Cocoa Association, have
objected to the plan, saying they feared export taxes would make
Indonesian commodities less competitive on the world market.
Rahardi, who is also the chairman of the State Logistics
Agency, presided over the opening on Thursday of a Warehouse
Retail Center for Basic Staples, jointly operated by Inti Mitra
Mandiri Cooperative (Kopimma), PT Radyana Mandiri Perkasa and the
Association of Young Indonesian Businessmen.
Koppima chairman Juan Permata Adoe said the warehouse would
distribute staple products to cooperatives and small-scale
enterprises at reduced prices. (gis)