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