Morality not for sale

Morality not for sale

The Indonesian Bank Restructuring Agency (IBRA) will be busy
selling loan assets under its management this week. Top leaders
of the agency have proudly expressed their conviction that they
can recover at least 25 percent of the full value of these loans.

This is actually saddening as there is a strong indication
that those interested in purchasing the loans are the debtors
themselves. In other words, government officials feel proud of
being able to allow a discount of 75 percent to these
uncooperative debtors. Then, without feeling uncomfortable, they
charge the remaining amount of the loans to the state budget for
the next couple of decades. This burden reduces the government's
ability to provide basic facilities for the poor.

It would be better, then, that cases of recalcitrant debtors
be settled through the courts although perhaps the rupiah value
to be gained would be smaller. Even if the legal approach lead to
zero recovery, it would be all right. More importantly, this
crisis must be seized upon as an opportunity for restructuring
our economy, including developing a commercial environment which
will give incentives to professional business players and drive
away ill-intentioned investors.

Don't forget that IBRA is assigned the task of restructuring
the national banking system and not covering the deficit in the
state budget. Banks in Indonesia will never be sound if the
decisionmakers prioritize money over nurturing a morally healthy
business climate. - Koran Tempo