Public companies urged to help small firms

JAKARTA (JP): President Soeharto appealed yesterday to publicly-listed companies to use money raised on the stock exchange to either assist small and medium-sized companies, or purchase government bonds.

Soeharto took his campaign to eliminate the disparity between big and small companies one step further during a meeting with corporate leaders at the Presidential Palace in Bogor.

In off-the-cuff remarks, the President noted that as many as 200 large corporations in Indonesia had raised money at the stock markets by selling equity.

"The money they collected should not be used solely to expand their own businesses; this would only widen the gap and create a new problem," he said.

Instead, they should set aside part of these funds to help small and medium enterprises, he said.

If they still had large sums of idle money, they should buy government bonds: "The government will then have huge sums of money, and then it won't have to raise abroad anymore."

The big corporations could expand their business abroad, for example, into building power plants in Myanmar, said the President, who has recently completed a visit there.

As an example, the President said that if tycoon Eka Tjipta Widjaja still had spare money from selling equity at the stock exchange, he could invest in building a power plant in Myanmar.

"Then Indonesia wouldn't have to import animal feed from far away places like Brazil, and could buy it from Myanmar."

"This would clearly be mutually beneficial, and enhance regional cooperation," he said.

Soeharto met with leaders of companies involved in venture capital business financing. Venture capital firms are non-bank financial institutions that lend money and managerial assistance to small and medium-sized companies.

Soeharto has often turned to big corporations for help in the government's drive to eliminate poverty and narrow the gap between rich and poor. He has tirelessly reminded them that they owe much of their wealth to the political and economic stability his government has helped to create in the last 30 years.

Last year, he decreed that individuals and corporations whose after-tax income exceeded Rp 100 million must contribute 2 percent of their income to an anti-poverty fund.

The President also urged large corporations to set aside a small part of their assets for a fund to help develop cooperatives.

Soeharto said yesterday that he had heard of rumors the economy was dominated by a few large corporations, that gave little chance to small and medium-sized companies to grow.

To counter the rumors, big companies must assist small and medium companies and allow them to grow, he said, adding that the government was resolute in ensuring every person had an equal opportunity to do business.

He warned that the disparity between rich and poor had been politicized by people bent on destruction

"There are people who cannot enjoy the fruit of development and who do not share in the government's thinking.

"This must be stopped," he said.

Present at yesterday's meeting were Minister of Finance Mar'ie Muhammad, Minister of Cooperatives and Small Enterprises Subiakto Tjakrawardaya and Armed Forces Chief Gen. Feisal Tanjung.

Mar'ie told the meeting there were currently 20 venture capital firms in Indonesia established jointly by state-owned PT Bahana Artha Ventura, which acted their majority shareholder, and 705 business tycoons, corporations, cooperatives and foundations.

He said up to 112,000 small enterprises employing 139,000 people had benefited from venture capital.

As of January, the 20 venture capital firms had Rp 85.9 billion in equity, of which Rp 19.7 billion came from Bahana Artha and Rp 66.2 billion from the private sector.

Soeharto is a shareholder in some venture capital firms, including one in Yogyakarta, PT Sarana Yogya Ventura, and in Surakarta (Solo), PT Sarana Surakarta Ventura. He has personally injected at least Rp 100 million in both companies.

The Japanese government has extended $200 million to help develop the venture capital concept in Indonesia, although Indonesia had requested only $50 million, Mar'ie said.

"They (the Japanese) even said they would lend more money once that $200 million is used up," he added. (emb/pwn)