State firms 'must set aside' profit for the poor

JAKARTA (JP): The government announced on Monday it would order state-owned companies to contribute 1 percent of their net profit to poor families and small-scale enterprises.

The Office of the Coordinating Minister for the Economy said in a media statement that the decision was reached during a meeting of economics ministers.

"The meeting decided to instruct state-owned enterprises to allocate 1 percent of their net profit to the two programs," the office said.

The government said the financial contribution from state enterprises was needed because the government loan program for poor families (Kukesra) and for small enterprises (KPKU) was short of funds.

The funding shortage, the government said, occurred after the previous administration of president B.J. Habibie scrapped an earlier ruling stipulating that state enterprises contribute 2 percent of their net profit to Yayasan Dana Sejahtera Mandiri (YDSM), a foundation that was the traditional funding source for Kukesra and KPKU.

The government said the Kukesra loan program needed an additional revolving fund of some Rp 312 billion for this year, while KPKU needed an additional Rp 58.5 billion.

The YDSM foundation is one of five social foundations which former authoritarian president Soeharto allegedly used as a vehicle to illegally amass a fortune.

Soeharto is now on trial on charges of wrongdoing in the raising of funds for the foundations and the use of such funds.

Amid strong public pressure, Habibie, Soeharto's hand-picked successor, in 1998 revoked all previous presidential decrees and instructions mandating financial contributions to the Soeharto- linked foundations.

The government said in the statement that it would ask the Attorney General's Office to allow YDSM to continue channeling funds to Kukesra and KPKU programs despite the charges against Soeharto.

The government has also decided to allocate more funding for the Ministry of Culture and Tourism to enable it to participate actively in the upcoming Oct. 18 to Oct. 21 China International Tourism Fair in Shanghai.

The government said that China would consider Indonesia one of the choice tourist destinations for its people.

The statement also said that the minister of trade and industry and the minister of finance would reorganize the antidumping commission and reevaluate its members in a bid to improve its performance.

The government repeated earlier remarks by Coordinating Minister for the Economy Rizal Ramli that the government would consolidate data on the country's corporate foreign debt which had been restructured both through the Jakarta Initiative Task Force (JITF) and outside the JITF mediation process.

The statement said the data consolidation process must be completed before Sept. 25.

The government expects international rating agencies to upgrade Indonesia's rating as the new data would indicate a smaller debt overhang.

Rizal estimated last week that some US$10 billion in overseas corporate debt had been restructured outside the JITF mediation process.

He also said he planned to visit New York to talk with international rating agencies over the new developments in the country's corporate foreign debt restructuring process.

Indonesia has some $65 billion in corporate foreign debt.

The JITF has so far helped restructure some $5 billion in corporate overseas debt, and the agency is expected to be able to help in the restructuring of another $3 billion to $5 billion up to the end of the year. (rei)