Redistribute assets lawfully to avoid suspicion: Kadin

Redistribute assets lawfully to avoid suspicion: Kadin

JAKARTA (JP): The Indonesian Chamber of Commerce and Industry
(Kadin) called on the government on Thursday to pursue legitimate
ways to redistribute productive assets to avoid suspicion among
foreign investors.

Kadin chairman Aburizal Bakrie said that a lawful asset
redistribution would be conducted through fair transactions, not
through charity.

"The way should be through purchases... But the government
should give more opportunities to small and medium enterprises to
purchase those productive assets," Aburizal told journalists
after a meeting of the chambers new board of executives.

Such opportunities for small firms could be translated into a
fixed portion of shares when the government privatizes state
firms or liquidates state assets.

The government could also give a discount to small firms or
small local investors to buy shares of state firms or companies
it has taken over and sells through local stock markets.

Aside from the stock market, the government could also pursue
other legitimate ways of redistributing assets. For instance, by
tendering expired forest concessionaires, again, giving priority
to small and medium firms.

"The country's large productive assets should not anymore be
controlled by a small number of people. Therefore, I think it is
just fair to give more attention to small and medium
enterprises," Aburizal said.

He said that he supported the government's policy of providing
billions of dollars of subsidized credits to small firms and
cooperatives, because it could bridge the gap between the rich
and the poor.

The government has allocated Rp 10.8 trillion (US$1.44
billion) in funds for small enterprises and cooperatives.
However, only some Rp 2 trillion has been disbursed.

Aburizal said that the chamber was prepared to help the
government channel the credits to the right targets.

He said he believed credits to small firms would be productive
and could create more economic activities and employment.

In addition, loans defaulted by small firms in Indonesia stood
at around 2 percent, far below the some 50 percent defaulted by
big businesses, he said.

"Since the government for decades gave more attention to big
businesses through credits which turned out to be sour, it is
time for the government to give more attention to small firms
through credits," he said.

"Besides, Rp 10.8 trillion is nothing, compared to the bad
debts owed by big businesses. This amount is just the same with
the outstanding debt of one big company," he said.

Giving credits to farmers, small firms and cooperatives would
help the country's beleaguered economy, because it would create
more productivity and eventually encourage domestic demand, he
said.

If all allocated credits for farmers, small firms and
cooperatives could be disbursed this fiscal year, Indonesia's
economy would start to book a modest recovery next year.

Nevertheless, Aburizal warned that such a recovery would still
be undermined by the huge unresolved foreign debts owed by big
businesses.

"I guess this debt hangover will not be resolved until the end
of 1999. Until then, foreign private capital will not re-enter
the country," he said.

"The most optimistic view is that parts of this foreign debt
problem will be settled by the year 2000," he said.

Without foreign private capital, recovery in Indonesia's
economy would be very slow.

He said large businesses would still face big problems in 1999
due to lack of financing, high interest rates and weak domestic
demands.

"Thus, hope comes from these small and medium businesses. With
enough financing from the government, they would drive output and
encourage demand." (rid)