Kalla: Trade is key in developing Indonesia

Vice President Jusuf Kalla has sought to give the Indonesian entrepreneurial spirit a boost, for the sake of the country’s development.

“The profession of merchant is very important for Indonesia,” Kalla told some 1,200 participants of the Minang Merchants’ Meeting in the West Sumatra provincial capital of Padang on Saturday.

“This kind of meeting is very important to exchange the entrepreneurial spirit. Without such spirit, Indonesia will not rise after 10 years of dependence on goods imported from countries such as China and Japan and foreign loans.”

Merchants’ meetings are also being held among the ethnic Acehnese and Bugis traders and businesspeople.

Kalla said no nation could develop itself by being dependent on other nations.

“If we (the government) were so proud in the past of getting foreign loans, it is time to change this,” he said.

“We should be proud of paying our debts, instead.”

Kalla himself comes from a trading and business family.

“Becoming a merchant requires the spirit and intellectual ability,” he said.

The first Minang Merchants’ Meeting was held last year. Participants were involved in dialogues with successful businesspeople from West Sumatra.

Indonesian Employers Association chairman Sofjan Wanandi, who was born in Sawahlunto, said trade figures were low because business networking in Minang was still weak.

He said what was needed was to develop synergy among businesspeople and to improve the quality of businesses.

West Sumatra Governor Gamwan Fauzi said there had been many inquiries about how much new investment there was in the province after the first meeting was held last year.

“I said that new investment in West Sumatra is my responsibility and not that of the merchants’ meeting,” he said.

“As of October there was about Rp 15 trillion (US$1.53 billion) in loans disbursed for this year, while there was only Rp 12 trillion last year.”

By Syofiardi Bachyul Jb
Source : The Jakarta Post

SBY, Kalla relatives clash over bad loans in BNI

State-controlled Bank Negara Indonesia (BNI), the country’s third largest lender, pledged Tuesday to speed up settlement of bad loans owed by a cement producer linked to Vice President Jusuf Kalla.

BNI president director Gatot M. Suwondo, the brother-in-law of President Susilo Bambang Yudhoyono, says resolving the bad debts of PT Semen Bosowa Maros is a priority.

“The difficulty in the restructuring is because the loans are a syndication involving other banks,” said Gatot during a press conference.

South Sulawesi-based Semen Bosowa is owned by businessman Aksa Mahmud, the brother-in-law and close confidant of Kalla.

BNI director Krishna Suparto said the Semen Bosowa bad loans had long dominated the bank’s non-performing loans (NPL) portfolio, being the largest of the bank’s top 10 bad debts.

Semen Bosowa’s outstanding loans to BNI now total Rp 584 billion (US$63.8 million), comprising almost 30 percent of the lender’s total bad loans of Rp 2.09 trillion, Krishna said.

“At least 50 percent of bad loans will be restructured by the end of 2008, including those of Bosowa,” he said, refusing to detail the restructuring proposal.

In the bank’s first semester review report, Semen Bosowa is required to let new investors or creditors take shares in the company, to speed up debt settlement.

A restructuring scheme is slated to be signed in August, according to the report.

BNI, along with two other state controlled Bank Mandiri and Bank Tabungan Negara, channeled syndication loans worth Rp 1.2 trillion to Semen Bosowa’s parent Bosowa Group in 1996.

After the 1997 financial crisis the Group defaulted on its debts.

Aside from controlling Semen Bosowa, the Group, which is now the largest conglomeration in eastern Indonesia, has numerous subsidiaries participating in government-linked infrastructure projects, including turnpikes and power plants.

This bad loans saga has raised tensions between Yudhoyono, founder of the newcomer Democratic Party, and Kalla, chairman of the ruling Golkar Party, ahead of next years’ general election.

Meanwhile, BNI announced its NPL ratio has declined to 7.4 percent as of June 30, from 9 percent a year earlier. NPL is an indicator of a bank’s health, especially its prudence in channeling loans to borrowers.

“We expect the NPL (ratio) to be below 5 percent by the end of 2008,” Gatot said.

The bank, however, posted a 57 percent drop in net profits to Rp 439 billion in the first half of this year, from Rp 1.02 trillion in the same period of last year.

The decline has been mainly attributed to a large provision to cover bad loans.

Between January and June this year, BNI channeled Rp 20.77 trillion of loans.

Its outstanding loans as of June 30 amounted to Rp 99.02 trillion, up 27 percent as against Rp 78.25 trillion a year earlier, the bank said in a statement.

Gatot said the industry sector absorbed 28.1 percent of lending, while the trade, restaurant and hotel sector absorbed 20.6 percent. (The Jakarta Post)