Minister urges withdrawal of state assets from East Timor
Minister urges withdrawal of state assets from East Timor
JAKARTA (JP): Minister of Cooperatives and Small Enterprises
Adi Sasono said Indonesia must immediately withdraw all of its
assets from East Timor before the territory becomes an
independent state.
The assets should be used to finance development in
Indonesia's 26 other provinces, Adi said in the West Sumatra
capital of Padang.
He said his ministry is considering initiating the move.
He did not give details of the assets that his office controls
in East Timor.
Adi, one of few Cabinet ministers to openly welcome the
announcement of the East Timor vote on Saturday, said the
separation would save Indonesia US$100 million each year, as this
was how much had been spent annually on the province in recent
years.
Indonesia has invested heavily in East Timor's economic and
social infrastructure in the 23 years since its annexation of the
former Portuguese territory. This includes roads, bridges,
schools and government buildings, hospitals and houses of
worship.
The government has also been encouraging the private sector to
invest in East Timor, although there have been few takers given
the constant disruption to security in the territory.
State Minister of Investment/chairman of the Investment
Coordinating Board Marzuki Usman said on Monday that in 1998, the
government approved two foreign investment projects worth $45.2
million.
They were for Portuguese trading firm PT Sotrei Timor and
Australia's Austin Hotel.
The government also approved Rp 3.3 billion ($417,700) worth
of investment projects from Indonesian companies in 1998.
During the year, five investment projects worth Rp 871.9
million were implemented.
The Indonesian investors include property developer PT Sunaplo
Agung Sejahtera, hotelier PT Multi Pesona Maya, TV broadcaster
SCTV, pearl cultivating firm PT Siera Beta Pranasakti and
transportation firm PT Wisesa Nugrahatama.
The investment figures do not include investment in the oil
and gas sector. Indonesian and foreign oil companies have set up
base camps in East Timor to explore for oil in the sea off East
Timor, called the Timor Gap. The area, a disputed territory with
Australia, has been designated a joint exploration zone by the
Indonesian and Australian governments.
Marzuki said that following last week's ballot in which East
Timorese voted to separate from Indonesia, the Indonesian
government no longer has any authority over investment projects
in the territory.
He said the fate of foreign and local investments in East
Timor would depend entirely on the investors themselves.
"But the rights of the investors must be fully preserved. If
the (new) East Timor government wants to nationalize the private
investments, they must provide compensation for the investors,"
he told reporters.
Separately, central bank governor Sjahril Sabirin said all
banking transactions ceased to operate in East Timor starting on
Monday because of the violence there.
They would only resume business when peace and order were
restored, he said.
The central bank transferred its East Timor operations to
Kupang, the main town in West Timor, he said.
"There's nothing we can do there at the moment. Starting
today, all banks have stopped their operations there," he told
reporters after meeting with senior economic ministers.
In a related development, the International Monetary Fund said
on Monday that it is closely watching the situation in East
Timor, noting that Indonesia should have "every interest" in
ensuring that peace is restored to the troubled half-island.
"The International Monetary Fund, like other institutions, is
closely watching the situation in East Timor, and welcomes the
generally peaceful referendum vote," an IMF official was quoted
by Dow Jones as saying.
"However, it notes with concern the violence that has
continued to mar the process in East Timor," the official added.
The official did not say whether the IMF would consider
withholding some of its standby loans for Indonesia if it failed
to restore law and order in East Timor.
But he warned that Indonesia had an obligation to ensure that
the transition process in East Timor unfolds smoothly.
"Indonesia, which is making progress in its program of
economic reform and recovery, supported by the international
financial community and through the IMF, should have every
interest in seeing the process in East Timor unfold smoothly and
without violence, in accordance with internationally recognized
norms," the official said.
The IMF, which led a $40 billion international bailout of the
Indonesian economy, is scheduled to release the next installment
of its $460 million loan to Indonesia later this month.
The release date of this installment has been in question
since the unfolding of a huge banking scandal last month.
(rei/02)