Minister wants closed bank lawsuits dropped

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)