Minister wants closed bank lawsuits dropped

JAKARTA (JP): A cabinet minister asked the owners of Bank Andromeda and Bank Jakarta to withdraw their lawsuits against the government over the closure of the two banks in order to help the country's economic reform.

Minister of Transmigration Siswono Yudohusodo, a former successful businessman, predicted Saturday that the rupiah would move up by 50 points against the U.S. dollar if the bank owners dropped their legal action.

The rupiah would otherwise slide 100 points if the bankers continued with their legal battle and won, or increase by only 30 points if they lost in court, according to Siswono.

"I personally hope they will consider the greater interest of the country and drop their suits. By doing so they would boost public confidence in the rupiah, although I fully understand how disappointed they were with the government's decision, and I respect their legal rights," Siswono said.

The minister, known for his customary sharp commentaries on many social and political issues, was speaking in the annual congress of businesspeople of Kosgoro, a cooperative affiliated to the ruling Golkar group.

Bank Andromeda, partly owned by President Soeharto's second son Bambang Trihatmodjo, and Bank Jakarta, owned by Soeharto's half-brother Probosutedjo, are challenging the government at the Jakarta State Administrative Court because their banks were included in the list of 16 banks closed on Nov. 1.

The closure of the ailing banks was part of an economic reform package demanded by the International Monetary Fund in exchange for its $23 billion bailout to help heal the troubled Indonesian economy.

The bank owners would gain public respect, rather than losing their credibility or integrity, if they withdraw their lawsuits, Siswono said.

"Even if they won, they would not gain any benefits. They would instead discourage the economic reform effort," he said, citing a Javanese proverb which stated that a good deed could be considered wrong if it adversely affected the public.

Siswono defended the government's stringent measures, saying that it had paid dividends with the strengthening of the rupiah.

On Friday, the rupiah closed at 3,280 against the U.S. dollar, far above its record low of 3,850 before concerted assistance came from various sources.

Lesson

Siswono said the protracted currency crisis should serve as a lesson for the government.

"We should from now on prioritize the establishment of a clean government... Whether we like it or not, we have to admit that there have been irregularities, accepted as common practice in this country," he said.

A government, which is clean from corruption and collusion, would help improve the country's economic efficiency and boost its competitiveness in the international market, he added.

He said laws alone were not enough to manage a country. Morality was needed in both society and the government.

"A society with laws but no morals tends to violate those laws," he said.

Siswono, however, opposed suggestions demanding that the People's Consultative Assembly establish a decree stipulating a clean government.

"We cannot rely on formal regulations to make a clean government materialize. I find it a matter of political morals," he said.

Back to economic matters, Siswono blamed the monetary crisis in part on businesspeople whom he said had borrowed and imported excessively.

"From now on, I persuade you (businesspeople) to be conservative in terms of bank credits. It would be better for you to invite more shareholders rather than to seek more loans," he said. (amd)