Astra pact a boost for Jakarta : BG Yeo

The Trade and Industry Minister says the breakthrough could pave the way for more foreign investments.

THE recently concluded Astra agreement was a “psychological breakthrough” for Indonesia and could pave the way for more foreign investments in the country, Trade and Industry Minister George Yeo said yesterday.

Speaking to reporters here, he said Singapore GIC’s co-investment with the Indonesian Bank Restructuring Agency (Ibra) for the sale of assets of the country’s largest automobile firm, was important in reaching this breakthrough when no one was sure the deal would take place.

“After two or three false starts … many international investors in their hearts were not sure whether the Indonesians were serious,” he said.

As a result, other assets were now being primed for sale including the Bank Central Asia (BCA).

“After three or four assets sold, what we want is for investors to say later that they should have gone in earlier. If that happens, we would have succeeded in helping Indonesia,” said BG Yeo, who is leading a Young PAP delegation on a five-day goodwill visit.

He disclosed that he met Ibra chief Cacuk Sudarijanto last week in Singapore during which Mr Cacuk wanted Singapore to make an offer for BCA, in particular – before Ibra took it on a road show to London, New York and Tokyo.

“With this they can knock on other doors and ask for similar offers. That makes our participation valuable to them,” he said.

At the same time, Jakarta was also looking into Singapore’s suggestion to set up an international board aimed at benchmarking its assets at international standards.

He said that besides the Astra example, the Republic had taken concrete steps to help the Indonesian economy in other ways. This included boosting the tourist industry by having more SIA flights to Jakarta, Bali and other destinations. But he cautioned that there was a need to moderate Indonesia’s “excessive expectations” of what the Republic could do to help it.

He said Singapore’s participation in future investment decisions here through the GIC would continue to be based on “a professional approach”.

By becoming “partial and political”, the Republic’s own credibility would quickly evaporate. Underscoring a point he has been making to several Indonesians, he said: “Our interests are fully allied to Indonesia. Indonesia does well, we do well. Indonesia suffers, we suffer. Indonesia breaks up, our lives will be a misery.

“But our value to Indonesia … is that we give an accurate reading of what is going on in the country to other countries … we must be credible. If we oversell, if we are unrealistically optimistic, then very quickly we will be found to be wrong and unreliable and we will lose our value to Indonesia. That is the only way we can play a catalytic role.”

The delegation yesterday also called on President Abdurrahman Wahid and Vice President Megawati Sukarnoputri.

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