Kwik opposes divestment of Bank Niaga

The Jakarta Post, Semarang

State Minister for National Development Planning Kwik Kian Gie has reiterated his opposition to the government's plan to sell Bank Niaga, arguing that the divestment would be a huge loss to the people.

"I think it would be better not to sell Bank Niaga. I had earlier taken a similar position on the divestment of BCA. I am also against this new divestment," Kwik told reporters here on Friday.

He said with the divestment spree, the state's assets will soon be exhausted.

"I had fought against the divestment of BCA, and I lost. My protest against the selling of Bank Niaga will also be apparently ignored," he said, as quoted by Antara.

The divestment of BCA, Bank Niaga and some other banks is based on the prodding of the International Monetary Fund (IMF), as outlined in the recent Letter of Intent.

Kwik disclosed that the IMF has set a deadline for the selling of the banks -- Bank Niaga by the end of this month, while Danamon and Mandiri by the end of this year.

The minister said selling Bank Niaga would be repeating the same mistake committed by the government in divesting 51 percent of BCA shares. By selling 51 percent of BCA's shares, the government earned Rp 5 trillion (US$555 million), but the bank has a total bond of Rp 60 trillion to be paid by the government.

Twelve months after the BCA sale, the government will have to pay Rp 10 trillion in bond interest, or equivalent to 100 percent of BCA shares.

Kwik noted that the same modus, albeit with a different amount, applies in the divestment of Bank Niaga. From the sales of 51 percent of the bank's shares, the government will collect Rp 1 trillion. However, the bank has a total bond of Rp 8.3 trillion, to be paid by the government.

"Even a sidewalk vendor knows that it is a loss to the people. But the IMF claims that it is necessary to restore the confidence of foreign investors. Alas, no investor has come in," Kwik said in an interactive dialog at the Diponegoro University here.