State firms 'must set aside' profit for the poor

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)