S'pore urged to help Indonesian economy
S'pore urged to help Indonesian economy
SINGAPORE (AFP): An outspoken Indonesian economist on Thursday urged Singapore to step up assistance in reviving lending to businesses in Indonesia, saying some of the capital which has fled to the city-state should flow back.
Despite "unofficial" initial meetings between Singapore and Indonesian representatives seeking to aid Indonesia's recovery, "Singapore seems reluctant to help," said Sjahrir, chairman of the Institute of Economic Studies Research and Development in Jakarta.
"Singapore is becoming the most important place for the capital market. Singapore can assist in developing Indonesia's banking systems," Sjahrir told businessmen at a forum here on Indonesia's political and economic future.
"Lending is the most important and Singapore is important to this," he said.
"The state of Indonesian banking is that the entire Indonesian banking system is insolvent. The question is whether banks can start lending, the answer is very unlikely," he said.
The Indonesian Bank Restructuring Agency (IBRA), an autonomous body tasked with rehabilitating Indonesia's insolvent banking system, "will have a part in recapturing the money" that has left Indonesia, he said, adding that "some of this (money) is in Singapore."
"Indonesia has every right to know what happened to the money ... There is money accessible that can be returned to Indonesia to address the insolvency problem," said Sjahrir, who is also chairman of a capital market securities company that bears his name.
He warned that unless Indonesian businesses could have access to capital to resuscitate their businesses, poverty would worsen and lead to more unrest.
"Southeast Asia, ASEAN, will not be successful with an anarchic Indonesia," he said, referring to the nine-member Association of Southeast Asian Nations.
But his call was rebutted by Tommy Koh, Singapore's Ambassador-at-Large.
"Singapore wishes to help Indonesia recover but we can only do that if you help yourselves," Koh said at the forum.