Private sector told not to rely on offshore loans

JAKARTA (JP): Vice President Try Sutrisno called on Indonesian private companies yesterday not to rely on foreign loans to finance their operations.

The Vice President said the private sector should operate more efficiently so that it could reduce offshore borrowing.

A closer cooperation between the private sector and the government was essential in anticipating a freer global economy in the next millennium, he said.

"I believe that if the private sector and the government can work closely together... our ailing national economy can recover and regain its strength and will be able to compete in the global market," Try said during the opening of the Chamber of Commerce and Trade's (Kadin) national leadership meeting at Merdeka Selatan Palace.

Kadin chairman Aburizal Bakrie in his written report to the Vice President said the country's private debts must be regarded as a national problem.

"Kadin believes that under the ongoing economic crisis, the private sector debt issue is one of our strategic problems which cannot be ignored... All possible solutions must be wisely and properly considered," Aburizal said.

Aburizal's report was read out by his deputy Taufiq Iman.

Aburizal and Indonesian business leaders are currently on a business trip to Washington D.C. and New York.

The business leaders are accompanying Minister of Finance Mar'ie Muhammad in meetings with the World Bank, the International Monetary Fund, European fund managers and commercial banks.

Mar'ie has repeatedly insisted that the government would not bail out troubled private businesses, although it would help lobby foreign creditors to roll over loans to Indonesian corporations worth US$65 billion.

Following the minister's recent lobbying trip to Japan, Bank Indonesia said about 40 percent of the private sector's short- term debts probably could be rolled over.

"Kadin's team and the government will hold meetings with fund managers in the U.S. to seek the roll-over of debts for two years to enable our enterprises to settle their debts," Aburizal said in his written report.

Earlier this month Mar'ie said the ongoing fall of the rupiah was triggered by private sector panic as companies rushed to buy U.S. dollars to pay their dollar debts. (prb)