Govt to extend dollar loans to private firms
JAKARTA (JP): The government is to extend U.S.-dollar loans to local export-oriented firms to help boost the country's non-oil exports, Minister of Industry and Trade Tunky Ariwibowo said here Thursday.
He told journalists at his office that more than 200 local companies had registered their names for the dollar loans to boost their working capital.
"The chance for companies to register their names is still wide open. We believe there are still a lot of companies out there that need help to continue their business," he said.
Tunky invited journalists to his office Thursday to explain the government's Upakarti awards. These will be presented to 64 people who have made prominent contributions to developing small businesses.
President Soeharto is scheduled to present the awards on Dec. 4.
Tunky said that his ministry and Bank Indonesia, the central bank, would assess the companies' applications and decide the size of the loans to avoid any misuse of funds.
He said that priority would be given to exporters with special status but his ministry would still consider applications from companies outside this category.
The Indonesian Textile Association's secretary-general, Benny Soetrisno, said most of the companies which had applied for the loans were textile and textile-related.
"Most of the companies are from the textile industry because the industry is the most active exporter and most of them are exporters with special status," he said.
He said 27 of the association's members alone had applied for loans totaling Rp 1.2 trillion (US$325 million).
Tunky said the government, through the Ministry of Industry and Trade, the Ministry of Finance and Bank Indonesia, had formed a policy to disburse dollar loans for export companies to supplement their working capital.
The loans aim to help exporters, especially those suffering from the rupiah's depreciation against the U.S. dollar, to finance their operations.
Tunky declined to disclose the amount of the allocated funds for the special loans, but estimated that the loans would total around US$5 billion.
He also declined to mention where the funds would come from.
Tunky's statement adds to the confusion following earlier news reports quoting President Soeharto as saying that he had instructed his monetary authorities to disburse a US$5 billion stand-by loan committed by Singapore to medium and big businesses.
Singapore Prime Minister Goh Chok Tong was quoted yesterday as saying that recent media reports that its US$5 billion aid to Indonesia would be used to bail out insolvent private companies were not true.
Goh said he had raised the matter with President Soeharto at a private discussion in Vancouver who confirmed that the reports were not true.
Both leaders were in Vancouver for the Asia-Pacific Economic Cooperation (APEC) forum conference early this week.
There has been some confusion in recent days over whether Singapore's loan, pledged as a back-up facility to complement the US$23 billion financing package from the International Monetary Fund and associated organizations, would be diverted to the private sector.
The confusion started over the weekend when Aburizal Bakrie, Chairman of the Bakrie Group, told Indonesian newsmen in Cape Town, South Africa, who were accompanying President Soeharto on a visit that the President had instructed monetary authorities in Jakarta to disburse Singapore's $5 billion facility to help export-oriented local companies.
Goh was quoted by the Singapore Business Times as saying that "the loan that we give or will give to Indonesia when it is needed-- it has not been given yet-- is a facility which they can draw upon if they need it for balance of payments purposes."
"It will not be used as loans for small companies in Indonesia," Goh said.
In a related development Deputy Prime Minister Lee Hsien Loong said that Singapore also had a separate arrangement with Jakarta to support the Indonesian rupiah as and when it is needed.
Lee was quoted by the same newspaper on Thursday as saying in Singapore " we have an arrangement for a standby US$5 billion loan, and we also have an arrangement to intervene when the rupiah is undervalued, which it was. But how much you need, how to do it, these are tactical decisions and there is no fixed limit."
Bank Indonesia clarified earlier this week that it would be the rupiah derived from Singapore's currency market intervention, not Singapore's promised standby loans, that would be used to finance the loans to local businesses.
"Our standpoint remains the same as before, I think you all have got our statement" Bank Indonesia managing director Paul Soetopo Tjokoronegoro told journalists Thursday. (08/das)