Habibie firm in rate debate

JAKARTA (JP): State Minister of Research and Technology B.J. Habibie backed down yesterday in the debate on interest rates, while senior economist Sumitro Djojohadikusumo called for more debate to create a more democratic society.

"Don't ask me anymore because I have explained a lot about the role of interest rates in development and industry," Habibie said when queried about his zig-zag theory on interest rate reduction.

He told journalists to seek comments from other experts about his proposal to reduce interest rates to 4 percent and then increase them to settle at a "comfortable" level, at about half of the current levels of between 18 percent and 20 percent.

"I have explained the theory in front of economists and industrial experts. My proposal is very transparent. And the best thing for you is to ask comments from other experts," he told Antara yesterday.

His proposal has been rejected by the majority of local economists, including Sumitro, who described the theory as entirely unfeasible given the condition of Indonesia's economy, which suffers from high capital costs.

Sumitro said, however, the airing of such proposals was a suitable way to stimulate public debate.

"Differences in opinion are normal, but don't become enemies. Young people should learn this kind of attitude," he said.

He said he respects Habibie as an engineer. "He is genius and is very good in his field. I respect him, and I have no hard feelings against him." (rid)