U.S. Exim Bank doing no new business here

U.S. Exim Bank doing no new business here

HONG KONG (Dow Jones): One of the few U.S. government agencies that could help rescue beleaguered Indonesian companies from the ravages of Asia's currency crisis says it hasn't been able to provide any financial assistance.

In May, the Export-Import Bank of the U.S. announced a US$1 billion package to help support U.S. exports to Indonesia. But since then, the bank hasn't done any new business under the package, said the bank's chairman, James Harmon, in an interview with Dow Jones. A spokesman for the bank said that he believed the bank had done no business at all in Indonesia during the financial year that began on Oct. 1, 1997.

Assistance from the Exim bank could provide a crucial shot in the arm for many Indonesian corporations which are in dire straits because they can't afford to buy U.S. or other foreign goods following the sharp plunge in the rupiah's value. The Exim bank provides loans, guarantees and other support to overseas countries that want to buy U.S. exports. In the 12 months ending Sept. 30, the Exim Bank has so far supported about $15 billion in U.S. exports worldwide.

Harmon said that after an initial agreement was reached in May between Washington and Jakarta, the Indonesian government was "supposed to come back to us to finalize the agreement." Harmon attributed the lack of progress from Jakarta to the subsequent change in government, in which B.J. Habibie took over as President from long-standing leader Soeharto.

Harmon said he hoped Washington and Jakarta would soon be able to hammer out a final agreement, but he declined to say when this would take place. "I think we're close," he said.

Asia has long been an important market for the Exim bank, but the region's financial crisis has slashed the level of U.S. and European exports to Asia. Harmon said the level of business done in Asia by the Exim banks from the so-called G-7 industrialized nations has dropped about 50 percent since last year.