Mahathir asks RI to aid investors

Mahathir asks RI to aid investors

JAKARTA (JP): Visiting Malaysian Prime Minister Mahathir
Mohamad asked Indonesia on Thursday to provide "some facilities"
for Malaysian investors to enhance bilateral economic ties.

Mahathir did not explicitly explain what kind of facilities,
although he cited more landing rights for Malaysia's flag carrier
Malaysia Airlines (MAS) in Indonesia as an example.

"We asked the government of Indonesia to give Malaysian
investors here some facilities," he told a joint news conference
with President Abdurrahman Wahid at the State Palace.

Mahathir also proposed expanded shipping services between
Malaysia's Port Kelang and Tanjung Priok and other Indonesian
ports.

However, when later asked what facilities Indonesia would
offer to Malaysian companies, the President simply replied: "What
is important is the principle of competition."

Mahathir, on a two-day working visit here, returning
Abdurrahman's visit to Kuala Lumpur in November, was greeted by
the Indonesian leader upon his arrival at Halim Perdanakusuma
Airport on Thursday morning.

Mahathir's entourage included his wife Siti Hasmah, Minister
of Foreign Affairs Hamid Jaafar, International Trade and Industry
Minister Rafidah Aziz, Minister of Finance Daim Zainudin and
Minister of Primary Industry Lim Keng Yeik, and about 150
businesspeople.

The two leaders also discussed the possibility of setting up a
financial center in Brunei that would coordinate financial
affairs among the three countries.

"The financial center will likely be built in Brunei to
facilitate financial business among the three countries,"
Mahathir noted.

After the news briefing, the two leaders witnessed the signing
of eight memorandums of understanding (MOUs) between Indonesian
and Malaysian companies, including a cooperation agreement
between central banks Bank Indonesia and Bank Negara Malaysia, a
code-sharing agreement between MAS and PT Garuda Indonesia.

Other MOUs cover an oil exploration agreement between state
oil firm Pertamina and Malaysia's Tob Exploration Sdn. Bhd.

The two companies agreed to explore a 3,800-square-kilometer
oil and gas prospect in the Karapan block, off the island of
Java. The oil and gas field has a potential of 345 million
barrels of crude oil and 3.5 trillion cubic feet of natural gas.

The production-sharing contract with Pertamina, on a 70:30
basis in favor of the Indonesian oil company, runs for 30 years.

Other agreements are between PT Astra Graphia and Malaysia's
Three Intity Sdn. Bhd. to develop an electronic commerce system
in Indonesia.

Another memorandum of understanding was signed by First Perpec
Prime and a four-member Indonesian consortium, comprising Citra
Bakti Marga Terma Persoda, Citra Matram Siatria Marga Persoda,
Jakarta Lingkar Barat and Marga Nuriando Bhakti, to build city
traffic dispersal road networks for Jakarta.

Two Indonesian state-owned companies, PT Bahana Pakarya
Industri Strategis, tied up with PT Permodalan Nasional Madani
and the Export-Import Bank of Malaysia to develop oilpalm estates
in Sumatra.

Malaysia's Multimedia Development Corporation and a consortium
led by Komisaris Indosat also signed an accord to develop a
multimedia corporation for Indonesia.

Abdurrahman appealed to the visiting Prime Minister to help
Indonesia resolve its economic crisis.

The President told Mahathir that his government was willing to
learn from the Prime Minister's economic management and his self-
confidence in tackling Malaysia's economic crisis in 1997 without
financial assistance from the International Monetary Fund (IMF)
and other world bodies.

"I think we have a lot to learn from Malaysia as it's been
developing its own economic policies," the President noted.

Separately, Coordinating Minister for the Economy, Finance and
Industry Kwik Kian Gie told Malaysian business delegates that
Indonesia would honor business contracts made during the past
authoritarian rule of former president Soeharto in a bid to
create legal certainty in the country.

Kwik made the comments amid strong public pressure on the
government to revise the mining contract of giant gold mining
firm PT Freeport Indonesia in Irian Jaya.

There has also been increasing public pressure on the
government to revise or terminate other business contracts
allegedly conducted in a corrupt manner in the past.

Kwik invited Malaysian investors to look at the investment
opportunities in the various assets held by the Indonesian Bank
Restructuring Agency (IBRA), a unit under the Ministry of
Finance.

He said that the agency now held about 170,000 companies
transferred by former bank owners and bad bank debtors, which
meant that the government now owned 65 percent of the country's
productive assets.

"This means we're just like a communist country. The
government must immediately dispose these assets back to the
private sector," he said. (prb/rei)