IBRA agrees to release Sewu-New York Life funds

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) has agreed to release US$2.2 million belonging to Sewu-New York Life funds as part of the government's blanket guarantee for depositors at closed banks.

The agreement was made during a meeting between the agency's chairman, Edwin Gerungan, and the ASEAN Business Council in Washington on Thursday.

"We are encouraged that IBRA chairman Gerungan has agreed to an overall resolution which begins to return the funds of our Indonesian subsidiary," New York Life International's chairman and CEO, Gary Benanav, said in a statement.

Benanav said IBRA's decision to release the funds should send a strong signal to other foreign investors that Indonesia was taking the tough steps needed to restore confidence in the country's economy.

Sewu-New York Life had new sales of approximately Rp 133 billion in 2000. It has over 450 employees and more than 1,500 agents in Indonesia.

The insurance company has been attempting for the past two years to recover the funds it deposited in several banks that were later closed due to their negative Capital Adequacy Ratio (CAR) positions.

The government launched a blanket guarantee in early 1998 to protect depositors following massive bank runs that led to the closure of several major banks.

During the meeting, IBRA and the council also agreed to lay the groundwork for joint marketing activities to promote the prompt, transparent and efficient disposal of assets held by IBRA.

The council said it and IBRA had agreed to institutionalize a channel of communications between American investors and IBRA, which would include regular meetings, road shows, videoconferencing and the dissemination of information to potential American investors via the Internet.

"It is important to note that our first success under this new framework involves a long-standing investor in Indonesia. Their steadfast commitment to Indonesia, even during difficult times, has paid off in the long run," said Mr. Bower.

"There is a valuable lesson in this," he added.

ASEAN is the Association of Southeast Asian Nations. It groups 10 countries with a total of over 500 million people, and has a gross domestic product of $750 billion. ASEAN member countries are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

The US-ASEAN Business Council is a nonprofit, national organization in the United States that works to promote increased trade and investment between the U.S. and the member countries of ASEAN.(hen)