Chinese Indonesians can help return capital

By Protus Tanuhandaru (partly using the analysis of BLBI article written by Salman)

Jakarta, The Point

No longer deprived politically, Indonesian of Chinese descent are more likely to be willing to use their family and friendship connections to encourage Chinese Indonesian debtors residing in Singapore to return their misappropriated funds to Indonesia, says Rocky Gerung, a scholar who teaches philosophy at the University of Indonesia.

"Using their own connections, the Chinese Indonesians could help the Government of Indonesia (GoI) bring back the capital sent out to and deposited in Singapore, by their fellow Chinese debtors," he told The Point earlier this week.

"But this won't be possible and the debtors hiding there will remain free, as long as there is bigotry or resentment by native Indonesians towards the Chinese living in Indonesia," he said.

Many Chinese Indonesians, still distressed by the May 1998 riots, are in a state of diaspora -- most are afraid to return to Indonesia.

Of these Chinese Indonesians, few are debtors who owned Indonesian banks bailed out by GoI, by the issuance of Bank Indonesia Liquidity Support (BLBI), during the Asian monetary crisis of 1998: the year marked by 50% of Indonesia's capital being flown out to foreign countries, primarilly Singapore, according to Aviliani, of the Indonesian Development of Economics and Finance (INDEF).

Concurring with Aviliani, noted economist Dradjat Wibowo told The Point mid last month, that 60% of the sum of Indonesia's capital flight is stowed away in Singapore.

Both were asked for their comments after Andy Xie, an economist of Morgan Stanley Asia Pacific, resigned from the U.S. investment bank because of controversial remakrs he made in a leaked email about the selection of Singapore to host the World Bank and IMF conference.

"Singapore's success comes mainly from being the money laundering center for corrupt Indonesian businessmen and government officials," he stated, adding, "Indonesia has no money. So Singapore isn't doing well."

Estimated to owe the government collectively Rp3 trillion (US$333 million), the debtors include Marimutu Sinivasan, Ulung Bursa, Atang Latief, Lidia Muchtar, Omar Putirai, Adisaputra Januardy, James Januardy, and Agus Anwar -- most are Chinese Indonesians having individual liabilities amounting to over Rp100 billion (US$11 million).

But GoI has no plan to reschedule the deadline for the liabilities payment by these debtors, although preliminarily scheduled at the end of 2006.

"It must be settled by the end of 2006," JB Kristiadi, then executive head of the team that manages the loans, told The Point on Oct. 13.

"What's more," said Kristiadi, "there is no deal yet between the eight debtors and the government regarding the liabilities that must be paid off."

"Attempting to renegotiate the deal, Finance Minister Sri Mulyani requested the National Audit Agency (BPK) member Agung Rai to opine on legal matters to resolve any disagreement between the government and debtors on the amount of liabilities to be paid.

But even though BPK said they would do so, they have never complied with the request up to today.

Previously, the government could not decide on the amount of the debtors' final liability, which has hampered the debtors in settling their debts.

The government's last communication with BPK requested information on the debtors' positions, whether they're in a default position, unable to pay debts, or not.

The executive team for the settlement of the loans has summoned several debtors to find out the amount each debtor has to pay.

But results of several meetings have shown there are significant differences in the amount of liabilities the government has claimed and the amount claimed by the debtors.

Previously BPK confirmed that it would not re-audit the BLBI loans, even if the government requested it to do so.

"BPK has finished its audit. It was completed even before I got here, that was in Billy's (Satrio "Billy" Budihardjo Joedono, who was at the helm of BPK predecessing Anwar Nasution) time. So what more is there to audit?" asked BPK head Anwar Nasution rhetorically.