Success In Recovering BLBI Fund to Help Drive Economic Development

Kupang (Antara NTT) - Success in recovering Bank Indonesia Liquidity Aid (BLBI) from a number of obligors would help drive the country`s economic development, an economic observer has said.

Dr James Adam from the University of Artha Wacana was commenting on report that the Finance Ministry would continue to seek settlement of a remaining debt of Rp31 trillion of 22 BLBI obligors.

The 22 obligors include modern and general banks including one Bank Servitia, which was liquidated together with nine other banks in 2000 for misused of the aid fund.

Dr James Adam said the fund would be significant in driving the economic development, which is projected to grow 5.2 - 5.6 percent in 2018. The economy already showed signs of revival with growth recorded at 5.01 percent in the first quarter of 2017, up from 4.92 percent in the same period last year and from 4.94 percent from the last quarter of 2016.

The steady growth though not spectacular, would encourage corporations to issue bonds with better market, Dr James said here on Saturday.

He said with the economic revival, the business sector would grow that would need larger financing and at the same time more foreign investors would be drawn to the country. Indonesia is already a favorite for international investors for business venture.

Therefore, all related agencies mainly the law enforcement agencies are expected to provide full support for efforts to recover the BLBI fund, he said .

BLBI was provided by the government in a bid to cope with monetary crisis in 1997. The central bank, Bank Indonesia, extended Rp144.5 trillion to shore up banks facing liquidity problem, but a number of the BLBI receivers had failed to repay or have no intention of repaying their debts. Some have even misused the fund aid.

"Indeed, this would need time beside skills and determination to force the obligors," Dr James said.

Finance Minister Sri Mulyani, earlier said the ministry still holds the documents related to BLBI, adding the government would continue to go after full settlement of the obligors` debts.

The minister said the problem in settling the debt is related to law enforcement. All data about the debt have been handed over to the law enforcement agencies including police, attorney general office and international police, she said.

"We also have given KPK (the Corruption Eradication Commission) all the necessary data," she added.

Sri Mulyani said it is a must for the obligors to fully repay their debts including the interest based on the agreement. "The government would continue knocking on their doors," she said.

KPK has named former head of the Indonesian Banking Restructuring Agency (IBRA) Syafruddin Arsyad Temenggung a corruption suspect over the issuance of SKL, a letter declaring that a debt of an obligor had been fully repaid in April 2004.

The letter was issued followed a presidential instruction (Inpres) No. 8 of 2002, by then President Megawati Soekarnoputri. The issuance of the SKL, which was allegedly violating the proper mechanism, caused a potential loss of Rp3.7 trillion in state fund.

"KPK has found two proofs that Syafruddin Arsyad Temenggung had misused his power in issuing SKL for Syamsul Nursalim the owner of Bank Dagang Nasional Indonesia (BDNI) in 2004," Deputy chairwoman of KPK Basaria Panjaitan said last month.

Director General of State Assets Vincentius Sonny Loho said the Finance Ministry teams up with police and the prosecution office in demanding the repayment the remaining Rp31 trillion debt of 22 obligors. "It is still in the process," Sonny said, adding, the process is not without stumbling block.