Soeharto says financial services will be protected

Soeharto says financial services will be protected

JAKARTA (JP): President Soeharto stressed yesterday that the
government will not open financial services in the country too
much to foreign investors, even though many of them want to enter
the country.

"Bapak President said if we open the financial services too
much, we will lose because we are not strong enough (in the
sector)," Bank Bukopin president Muchtar Mandala told journalists
after reporting to Soeharto about preparations for the two-day
Asia-Europe Business Meeting which starts tomorrow in Paris.

Muchtar is among Indonesia's six-member delegation for the
meeting, which is a follow-up of the Asia-Europe summit held in
Bangkok earlier this year. The other delegates include A.R.
Ramly, Bustanil Arifin, Hashim Djojohadikusumo and Iman Taufik,
as well as economist Dorodjatun Kuntjoro-Jakti, who is
functioning as an advisor to the delegation.

Muchtar said many foreign investors in financial services have
expressed their interest in expanding their business in Indonesia
but could not do so because of a number of limitations set by the
government.

The government has so far licensed 10 foreign banks to operate
in the country. Four come from Europe, two are from the
Netherlands, one is from Germany and one is from Britain.

"France, Belgium and the others stress that they have none of
their banks operating here. They said: 'if you want us to invest
more here, please allow us to open our banks and our insurance
firms to support our investment here'," Muchtar said.

He noted that the opening of foreign banks will be alright.
However, Indonesia has its own interest in protecting its banking
industry because the country, with some 240 banks, has been
considered to be over-banking.

In addition, Muchtar said, Indonesia does not want to offer
something which is contradictory to its commitments to some
groupings in which it is a member, including the Association of
Southeast Asian Nations and the Asia-Pacific Economic Cooperation
(APEC) forum.

Meanwhile, Dorodjatun said that unlike APEC, the Asia-Europe
Meeting can take binding decisions, considering that it groups
sovereign nations, 20 from Europe and 10 from Asia, seven ASEAN
countries, plus China, South Korea and Japan.

ASEAN groups Brunei, Indonesia, Malaysia, the Philippines,
Singapore, Thailand and Vietnam.

"There is a hastiness on the part of Europe. They want to move
quickly, especially in the financial sector... If they talk
about investment, they always want to corner us," Dorodjatun
said.

He quoted Soeharto as saying that to build a better
understanding between Europe and Asia, developed countries in
Europe should take into account the development level of some
member countries in ASEAN.

Bustanil noted that European countries are pressing Indonesia
over the financial services because they feel they are suffering
deficits in goods trade with Indonesia. In fact, he added,
Indonesia still suffers deficits in its trade with European
countries.

Meanwhile, Ramly and Taufik said they would try to talk to
European countries about their increasingly protective market for
products from Indonesia.

Ramly said many consumer products from Indonesia face
difficulties in entering European countries because the latter
introduce new measures, including dumping and social and
environmental clauses, to bar those products from entering their
markets.

"We will try to solve these kinds of problems in our meeting
with them. We want our products to enter Europe more easily than
now," Ramly said. (rid)