Our foreign private loans problem

Our foreign private loans problem

Neither Ginandjar Kartasasmita nor Radius Prawiro -- the two
economists appointed, first by the previous regime's Seventh
Development Cabinet and then by the present Reform Development
Cabinet, to tackle Indonesia's private offshore debt problem --
could hide the relieve they felt (over the rescheduling
arrangement reached with foreign lenders). To (business expert)
A.A. Baramuli, though, things looked different. He questioned the
capability of any of the country's private companies to pay an
estimated US$15 billion a year in interest only, even though they
could make the payment in the rupiah currency equivalent.

Moreover, the government's intervention in the problem of this
country's private corporate debts owed to foreign banks raises
questions, even though the government has assured that it will
not bail out private companies. By intervening in our private
sector's debt problems, the government is also putting its own
credibility at risk. According to the chairman of the Indonesian
Chamber of Commerce and Industry (Kadin), Imam Taufik, this move
could diminish foreign trust in the government -- a most
important consideration in luring back foreign investors to
Indonesia. Another problem is that private sector borrowers in
this country might already transferred their money overseas.

What the public in general fears is that our private borrowers
might simply refuse to repay their debts and wait until the
situation here has returned to normal. They might then change
both their names and their citizenships and become investors
"with an interest in investing in Indonesia".

The Indonesian people would thus remain the milching cows of
international rogues making use of both the ignorance of our
people and the disposition of those of our leaders who, in the
words of (Indonesian sociologist) Prof. Selo Soemardjan, are
greedy and indifferent to the interests of our people.

-- Merdeka, Jakarta