Most ministers oppose debt extension plan, says Kwik
Most ministers oppose debt extension plan, says Kwik
Berni K. Moestafa, The Jakarta Post, Jakarta
State Minister of National Development Planning, Kwik Kian Gie
confirmed suspicions on Thursday that Cabinet members were
seriously divided over a controversial debt extension plan,
saying most members had rejected the plan.
Calling it the "silent majority" , Kwik said most ministers
had rejected the plan but lacked the technical understanding to
convincingly argue against it.
"Many ministers agree with me just by using their logic," Kwik
told reporters, after attending a Cabinet meeting.
His claim served as another blow for a plan to extend the debt
payment period for bad debtors to 10 years from four years.
The debtors are former bankers, on whose banks billions of
U.S. dollars were spent to bail them out in the wake of the 1997
financial crisis.
It turned out that most of the state-sponsored bailout funds
had been illegally abused.
To escape prosecution, the former bankers agreed to a four-
year shareholder settlement program.
Extending it to 10 years now, critics said, might tempt
debtors to skip payment altogether, when law enforcement should
have been the solution.
They added the plan smacked of injustice, at a time when the
poor must shoulder the burden of recent fuel price hikes.
Backers of the plan argued that debtors were unable to pay
over the last three years because of unfavorable business
conditions.
The Indonesian Bank Restructuring Agency (IBRA), which
initiated the plan, warned that without the extension, there
might be no payment at all.
"The heated debate centers on whether it's true that the debt
extension plan will ensure that the debtors will pay," Kwik said.
He said all arguments had been collected and forwarded to an
interministerial team that has been assigned to review the plan.
The team includes officials from the Coordinating Ministry for
Political and Security Affairs, which indicates the plan carries
some security risks.
Sources, quoting intelligence reports, have warned of social
uprising if the plan, deemed insensitive to the plight of the
poor, goes ahead.
The plan may also prove politically risky as top politicians
have used it to criticize the country's six-month-old
administration.
Among them is Assembly Speaker Amien Rais, who political
analysts said might pose a threat to President Megawati
Soekarnoputri at the 2004 general election.