IFC optimistic about Indonesia's prospects

IFC optimistic about Indonesia's prospects

JAKARTA (JP): The International Finance Corporation (IFC), a
World Bank agency which lends to the private sector, remains
optimistic about the prospects of the Indonesian economy and is
even looking to expand and broaden its operations here.

Visiting IFC vice president for investment operations
Jemal-ud-din Kassum dismissed "events in the summer" -- which is
how he described the currency turmoil hitting Indonesia and other
Southeast Asian nations -- as temporary.

In the event of the crisis, the IFC has reviewed its position
in the region, Kassum said.

"We're very pleased," he said of the results on the Indonesian
review. "It confirmed our judgment that whatever was going on,
was a temporary phenomenon that has to be dealt with."

He predicted an even stronger private sector emerging after
the crisis in view of the steps that had been taken by Indonesia.

Kassum wound up his five-day visit to Indonesia yesterday
after meeting with several top Indonesian officials and
representatives of the business community.

He was accompanied by the New Delhi-based IFC director for the
Asian Department Rashad Kaldany and Washington-based IFC South
Asian manager Sami Haddad.

Kasum, who praised the Indonesian government for recognizing
the need to strengthen the banking sector, said he was
particularly impressed by the economic management team.

IFC's total lending commitment to date is US$1.4 billion to 43
companies, including $362 million committed last year in six
different transactions. Half of the loan commitments were through
an arrangement which involved local banks in the projects.

Despite strong exposure to currency upheavals, Kassum said
IFC's loans portfolio in the region remained strong.

None of the Indonesian debtors had difficulties repaying their
debts, he said.

"On balance, there has not been any problem," he said.

Kassum added IFC was hoping to increase its operations in
Indonesia, broadening its coverage to more enterprises outside
Java and expanding its activities into new areas like education.

"We're ready. Our door is very much open," he said.

Kaldany said IFC was doubling its office in Jakarta in the
coming months, focusing on small and medium scale enterprises.

IFC has already financed its first hospital project in
Indonesia. The $49 million Siloam Gleneagles opened in the Lippo
Karawaci satellite city in Tangerang last year.

"We're looking at other hospitals," Kaldany said, adding that
IFC was working with Gleneagles Corp of Singapore to open up
diagnostic centers, mostly in Asia.

IFC was also looking at financing education projects such as
management training institutions and primary and secondary
education, he said.

There would not be any overlapping with the World Bank because
IFC would be financing the private sector, he said.

Kassum described IFC's overriding characteristic as "being a
pioneer", expanding into new areas and territories.

IFC chief mission for Indonesia and Malaysia, Antonio David,
said none of the two plantation companies financed by IFC -- one
in West Kalimantan and another in Riau -- was involved in the
forest fires blamed for much of the haze enveloping Sumatra and
Kalimantan.

"IFC used the World Bank environmental safety guidelines,"
Kassum said.

"We go out of our way to perform environmental due diligence,"
he said, adding that this includes banning the use of fire for
clearing land. (emb)