IBRA concedes asset disposal rate still low

IBRA concedes asset disposal rate still low

JAKARTA (JP): Deputy chairman of the Indonesian Bank
Restructuring Agency (IBRA) Arwin Rasyid acknowledged on Tuesday
that the agency's asset disposal rate over the past two years --
2.5 percent -- was still relatively low.

Arwin said that similar agencies had better rates, including
South Korea's KAMCO with a disposal rate of 38 percent,
Malaysia's Danaharta (40 percent), and Thailand's FRA (78
percent).

"According to a study made by McKinsey, the asset disposal
rate of IBRA is only 2.5 percent," he said during a
teleconference seminar.

IBRA, established in early 1998, controls assets worth US$66
billion.

The agency has received assets from closed-down, nationalized
and recapitalized banks.

The assets included loan portfolios with a face value of Rp
240 trillion, corporate equity worth between Rp 100 and Rp 140
trillion and bank equity worth between Rp 100 Rp 150 trillion.

The agency has to recover the assets to help raise cash for
the state budget and help recover the economy.

The agency is targeted to raise around Rp 18.9 trillion in the
current 2000 budget year. Last year, it raised around Rp 17
trillion.

Arwin said that IBRA's internal target for 2001 would be
around Rp 23 trillion.

Many people, including the International Monetary Fund (IMF),
have called on the government and IBRA to accelerate the asset
disposal program to help the country's crisis-hit economy
recover.

The critics have said that IBRA should not hold on to the
assets for too long to obtain a better deal, arguing that their
condition might deteriorate further.

Arwin did not clearly explain the factors behind the slow
disposal of the agency's assets, but he said that political and
economic stability was crucial to the success of the asset
disposal program.

Arwin also said that other factors were investor confidence,
and political will or national consensus.

Several IBRA officials have said that the agency has been slow
in selling the assets, partly due to the fear of being faulted
following the outbreak of the Bank Bali scandal last year.

Reports of collusion and corruption in the disposal of IBRA's
assets has also been seen as a factor behind their slow disposal.

The government has formed an additional oversight body within
IBRA to ensure that every dealing at the agency is conducted in a
transparent and fair manner.

The seven-member oversight body, to be chaired by IBRA's
chairman Cacuk Sudarijanto, will be complementary to the existing
international review committee (IRC), IBRA's ombudsman team and
the Financial Sector Policy Committee (FSPC), which groups
several senior economic ministers. (rei)