Rini to present Indonesia fund in New York

The Jakarta Post, Jakarta

Minister of Industry and Trade Rini M.S. Soewandi said that she would present the concept of the Indonesian Recovery Fund (IRF) at a meeting with international financial institutions in New York in January next year to invite the institutions to invest.

"I am optimistic that the IRF will be established in January and financed by international financial institutions," she was quoted by Antara as saying.

Rini said that although Indonesia's political and economic condition remained unstable, both international and domestic financial institutions have given positive responses to the IRF idea.

"We will mobilize funds from both domestic and international sources, because so far the recovery of our industries are stunted by lack of funds," she said on Thursday.

The government has already drawn up a list of industries that needed prioritizing, Rini said, quickly adding that IRF's investors would have the last say to which sectors would be given priority, but that she hoped they would take into consideration the government's proposal.

Rini said earlier that the IRF would be similar to a recovery fund established by the Thai government a year after it was hit by the 1997 regional financial crisis.

Initial funding for the fund was expected to reach US$200 million in which the government would contribute $10 million.

Among the investors in the Thailand fund were ADB, Japan Bank for International Cooperation (JBIC), Kreditanstalt fur Wiederaufbau (KfW) of Germany and State Street Corporation of the United States.

The fund invests in companies that are expanding or restructuring and to a limited extent in start-up companies.

Since the Asian financial crisis, many small and medium-sized enterprises have limited access to financing for expansion or restructuring. The fund helped to address this problem and assisted in restoring investor confidence in the Thai economy.