Subsidized loans from state firms on target: Official

JAKARTA (JP): State-owned companies channeled about Rp 600 billion (US$254.2 million) in cheap loans to small and medium- scale enterprises (SMEs) and cooperatives between 1989 and 1996, Director General of State Companies Bacelius Ruru said yesterday.

"It's untrue that the amount is off target, though the allocations have been reduced from 5 percent to between 1 percent and 3 percent of state companies' net earnings, Ruru said.

Ruru was addressing a workshop and exhibition on partnerships between state-owned enterprises and small-scale businesses and cooperatives organized by Yayasan Dharma Bhakti Astra, a foundation controlled by publicly-listed auto maker PT Astra International.

In absolute terms the state companies' allocations remain large because of their steadily increasing net profits, he said.

The 178 state companies recorded a combined pretax profit of Rp 9.32 trillion ($3.94 billion) last year, up 20.5 percent from 1994.

Since 1989 the government has required state companies to set aside up to 5 percent of their after-tax profits to help small- scale businesses and cooperatives.

This year the allocation was reduced to 3 percent, because 2 percent of their after-tax profits have been allocated to Yayasan Dana Sejahtera Mandiri foundation, which aims to help people living below the poverty line.

The government-sponsored Dana Sejahtera foundation was set up in January to manage donations from companies and rich people to finance poverty alleviation programs.

The foundation's founders include President Soeharto, in a personal capacity, businessmen Sudono Salim and Sudwikatmono and State Minister of Population Haryono Suyono.

Companies and individuals with after-tax incomes exceeding Rp 100 million a year are required to donate 2 percent of their incomes to the foundation.

Minister for Cooperatives and Small-Scale Enterprises Subiakto Tjakrawerdaya announced earlier this year that around Rp 540 billion had been distributed to small-scale businesses and cooperatives.

According to the Central Bureau of Statistics, 99.8 percent or 33.4 million of the 33.5 million businesses in Indonesia in 1994 were small enterprises, each with a turnover less than Rp 1 billion a year.

Minister Haryono said recently the Dana Sejahtera Mandiri foundation had collected Rp 321 billion, exceeding its original target of Rp 250 billion.

Dozens of SMEs and cooperatives are participating in the two- day workshop and exhibition which will end today.

Several heads of small businesses complained at the workshop that business partnerships between small and big companies did not work if the small firms were not reserved particular market segments.

"I understand that monopolies and oligopolies are the name of the game in certain industries," the head of a small business from Sidoarjo, East Java, said.

Yayasan Dharma Bhakti Astra chairwoman Rini M.S. Soewandi said yesterday the Astra foundation had developed partnerships with thousands of small and medium-scale enterprises and cooperatives through subcontracting and other business links.

The Dharma Bhakti Astra foundation was set up in May 1980. The foundation had established partnerships with 28,507 small firms and cooperatives in 14 provinces by June this year. (icn)