Jimbaran Group denies its aid to small firms is political

Jimbaran Group denies its aid to small firms is political

JAKARTA (JP): More than 40 conglomerates associated with the Jimbaran Group denied yesterday that their social mission to help small-scale businesses is merely a political maneuver designed to please President Soeharto.

"The group's commitment to help small-scale companies through partnership programs will continue even when Soeharto is no longer President," the group's chairman Sudwikatmono told a hearing of Commission VII -- trade and finance -- of the House of Representatives.

Sudwikatmono, also the president of the publicly-listed PT Indocement Tunggal Prakasa, said the commitment to help small- scale businesses is not a new program for the 41 companies associated with the group.

"And if the group was established following President Soeharto's appeal, it was only a matter of formalizing the aid procedures," he said in response to a question.

Saleh Khalid of the United Development Party questioned the group's commitment to helping financially weak companies, saying that the foundation could only have been set up to entertain the President and motivated by fears of losing an intimate relationship with the government.

"I am not sure if the Jimbaran group will continue to exist if Soeharto is no longer president," Saleh said.

Early this year 41 conglomerates, including those owned by Liem Sioe Liong (Sudono Salim), Eka Tjipta Widjaja, Prajogo Pangestu and Ciputra, established PT Mitra Dana Jimbaran, with an initial paid-up capital of Rp 50 billion (US$21.2 million), to aid small-scale companies.

The venture was established as a follow-up to the Jimbaran Declaration, a commitment made by conglomerate owners to make a breakthrough in coping with the widening gap in the country's economy at a meeting in Jimbaran on the resort island of Bali last year.

In addition, top conglomerate owners, most of whom are founders of Mitra Dana Jimbaran, also recently made a similar move to establish a different foundation to help alleviate poverty. Individuals and companies, with an annual income of at least Rp 100 million, are required to contribute around 2 percent of their earnings to finance the project.

The two financial assistance schemes were launched as the follow up to the Jimbaran meeting, which was reported to have been personally arranged by President Soeharto.

The financial assistance schemes are part of a series of arrangements made by the government to help financially weak companies. They include Soeharto's appeal to large companies to sell at least 1 percent of their shares to cooperatives at their nominal value and the requirement imposed on state-owned companies to allocate between 1 and 5 percent of their net profits to support the development of small- and medium-scale companies.

Sofyan Wanandi, a spokesman for the Jimbaran Group, said that large business groups should not be solely blamed for the country's widening economic gap. However he acknowledged that the government's aim to narrow the gap is a prerequisite for their survival.

"It is everybody's mistake. And we, therefore, have to correct it through such business partnership schemes," said Sofyan, also chairman of Gemala Group.

He acknowledged that many Indonesian companies established in the early stage of President Soeharto's administration in the 1960s have expanded into giant business groups partly because of such facilities as special tax treatment and subsidies on interest rates and being granted monopolies in certain business sectors.

"So it is natural if we now help the small ones. But don't expect too much from us," he said, adding that the government should play a leading role in such the project both in financial and operational terms.

Sofyan questioned why the government no longer introduces business incentives and facilities similar to those enjoyed by most of the present conglomerates in the past two decades.

Aburizal Bakrie, chairman of the Indonesian Chamber of Commerce and Industry, echoed Sofyan's view in the hearing, saying that large business groups should only act as the government's partners in supporting the development of small- scale companies and in dealing with the poverty problem.(hen)

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