Kadin wants exporters to sell dollars to BI

JAKARTA (JP): The Indonesian Chamber of Commerce and Industry (Kadin) urged the government yesterday to require all exporters to sell their export revenue to Bank Indonesia in a bid to bolster the country's foreign exchange reserves and the rupiah.

Kadin chairman Aburizal Bakrie told President B.J. Habibie at the Bina Graha presidential office that the central bank could easily collect about US$50 billion year if the plan was implemented.

Aburizal said his idea was fully supported by major exporters because, under the scheme, they would be entitled to buy hard currency at the same rate from Bank Indonesia.

"This way, we still maintain our free foreign exchange regime. And we believe it must be maintained," Aburizal said after meeting Habibie.

Habibie, according to Aburizal, gave a cautious reaction to his proposal and asked him to market his idea further.

"The President said it was better to conduct a poll, and if necessary to hold a seminar on the idea," Aburizal said.

When asked to identify exporters who supported his idea, Aburizal only mentioned two companies, the giant textile manufacturers Texmaco Group and Indorama Group.

Aburizal, chairman of the Bakrie Group, said it was high time the government adopted the plan because it was the best way to strengthen the country's foreign exchange reserves.

"Although our exchange reserves total about $14 billion, slightly above the International Monetary Fund (IMF) requirement, they're still at a minimum level," he noted.

"Our monthly exports are worth about $3.5 billion to $4.5 billion. Therefore in a year, we can put together some $54 billion into the system," he remarked.

Aburizal's call follows a similar request to the president from the Indonesian Vegetable Oils and Fats Association last month.

The association's vice chairman, Tarmidzi Rangkuti, asked Habibie to overturn Government Regulation No. 1/1992 that gives exporters freedom to decide where they convert their dollars.

Rangkuti, a former Bank Indonesia official, said the 1982 foreign exchange regulation violated Law No. 32/1964, which requires all exporters to sell their export revenues to the central bank, and the 1945 Constitution, which states that all proceeds from the country's natural resources should be used for the benefit of the Indonesian people.

The government has repeatedly stated its commitment to a free foreign exchange regime.

After the Economic and Finance Resilience Council's meeting chaired by Habibie last week, Bank Indonesia Governor Sjahril Sabirin reiterated that the central bank would maintain the current free foreign exchange arrangements, arguing that it served the country best in the long term.

"We want to have high-quality foreign exchange management and a high quality rupiah. And we can achieve that only by maintaining our free foreign exchange regime," he said. (prb)