Private sector told not to rely on offshore loans

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)