Laporan Utama

	Edition 37/02 - 15/Nov/1997
	Analysis & Events

Probosutedjo's "Opposition" Disrupts Government Authority

Bambang Tri withdrew his lawsuit, Probosutedjo went on, although both have met President Soeharto. Will Probo continue to protest? How far will the government be willing to compromise amidst the tight requirements imposed by the IMF?

Sixteen banks were closed by the Minister of Finance on November 1 1997. Thousands of bank customers in 19 cities in Indonesia-- from Medan to Ujungpandang-have been queueing to withdraw their savings since November 13. These were the 93.7 percent of customers of the 16 banks that had deposits of no more than Rp. 20 million.
Has the situation improved? Not really. In Jakarta a number of illegal leaflets have been circulating. These contained the names of almost 80 banks complete with a "code of warning" obtained from Bank Indonesia--if it is true.
Things came to a head on Friday night (November 14, 1997), when the Hongkong branches of BCA and Bank Lippo were rumored to be closed. "Taipan" Sudono Salim alias Liem Sioe Liong - about whom whisperings of ill health have been circulating for some time -- was reported to have died. Sure enough, there was a rush on BCA, its customers arriving in droves to withdraw their savings.
Finally, the taipan was "forced" to make an appearance at the launch of the Satria moped, manufactured by the Suzuki group, on Friday night. "I just came from abroad," said Salim in broken Indonesian. Om Liem had in fact just arrived from Singapore.
Besides those unclear news, the news about bank liquidation was flared up by the fact that Bambang Trihatmodjo withdrew his lawsuit to the Jakarta Administration Court. As reported in November 5, Bambang Trihatmodjo as owner of Andromeda Bank filed a lawsuit to Minister of Finance and BI Governor to Jakarta Administration Court. The businessman Probosutedjo also filed his suit on November 7, 1997- only two days after Bambang listed his lawsuit.
It was assumed that the meeting between Bambang Tri, Probosutedjo and President Soeharto "supported" what his aid did, namely Minister of Finance and Governor of Bank Indonesia, in bank liquidation.
Before the meeting, Minister Mar'ie Muhammad in the House of Representative, on Monday November 10 firmly explained his stance. Mar'ie frankly explained criteria of a bank being liquidated. Namely:

The bank asset is not enough to cover its responsibility, particularly because the huge number of insolvent credit.
The huge number of insolvent credit makes the bank unable to cover the cost spent, therefore, the loss from year to year is getting bigger.
The ability of a bank to collect people's fund is getting lower, so the fund source depends on the short-time money market with high interest.
Because of the big of loss accumulation, the capital becomes negative.
Reprimand and suggestion from BI was not positively responded from the bank owner.

From Mar'ie point of view, seemingly those 16 banks had long violated the points mentioned above. It was not clear, which point that Bank Andromeda and Bank Jakarta's Probosutedjo suffered.
Surely, businessman Probosutedjo-in his press release on November 11, 1997, said that his bank only got "cold, it should not be killed. In a discussion with Minister of Finance and Governor BI stacked, Probo affirmed that his side would not sign the liquidation official report. Probo finally filed a lawsuit to Jakarta Administrative Court.
Furthermore, Probo did pay his customers after his bank was liquidated. According to KUHP, it will get four-month punishment. After having met with Soeharto, Probosutedjo still fought against the decision. He said that responsibility of Bank Jakarta employees was not in his side, but Minister of Finance. Probo said he would obey the court sentence.
Probo's case is interesting to be followed. If he went on his way, government authority will be down. But if he "surrendered" and withdrew his suit, the authority of Minister of Finance and BI Governor would go down, because people will coincide Probo's surrender with Soeharto's involvement. Moreover, the court will prove that: Should Bank Jakarta be liquidated under the criteria that Mar'ie Muhammad delivered in the House?
Seemingly Probosutedjo ignored his bona fide as a businessman, as the reason of Bambang Tri that withdrew his suit. Probo, owner of Garmak Motor was known to be a tough person. He knew well if a bank was liquidated, his owner should found other bank in a long time. The bank owner will be included in black list for a while. It means a lot for reputation of businessman like him.
Will the dispute government vs. Probosutedjo show that government really doesn't have any choices but gives a sentence. It might be facts of life. Bank liquidation is one of some packages that IMF asked. IMF Vice Executive Director, Stanley Fisher, in his interview with D&R magazine last week said, "By following IMF program, the quality of Indonesian government is increased by restoration. No matter the risk is, the unhealthy banks should be liquidated.
If IMF program is not followed, after signing the first package US$ 3 billion aid, IMF can "cancelled" the next fund clearing. "If Indonesia cannot fulfill the target, the next aid will not be accepted," said Fisher.
The problem is the clear: The sick Indonesia economy need conditional therapy from IMF--without being able to be bargained. Economy reform should go on by cutting many issues-including special rights that have been enjoyed for a long time by the same businesspeople.
TH, HP, IS