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)