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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

TACKLING THE TYCOONS

How a young reformer is changing Indonesia


AS CHAIRMAN OF THE powerful Indonesian Bank Restructuring Agency, Glenn Yusuf butted heads with the country's well-connected but financially stressed tycoons. He ended up with their plantations, shares in listed companies and other assets to cover their indebtedness to the government. A former banker, 43-year-old Yusuf is on an international road show to raise funds for the recapitalization of Indonesia's banking sector. He spoke with Asiaweek's Alexandra A. Seno in Hong Kong.

How would you describe the negotiations with the well-connected borrowers?

The first thing we did was to meet everyone - Anthony Salim, Syamsul Nursalim and even Bob Hasan. Most of them were willing to cooperate. We talked about stability, especially since most of them were ethnic Chinese businessmen. During that time, there was a political backlash toward innocent Chinese businessmen, so we indicated to them that whatever actions they take in our negotiations would have some ramifications on innocent people in Indonesia. Also, they are of Asian and Chinese origin and would like to have their name rehabilitated, if possible. The name is something they will pass on to their sons and grandsons. It was also in their minds. Plus, we had a travel ban on some of them.

The companies [turned over to the government] are still run by the management under the previous owners. We do not pretend to know or understand how to manage plantations or property. But we have control over the financial side, making sure there is no siphoning off of funds.

How can Indonesia avoid repeating the mistakes of the past?

Bank supervision has to be strengthened and the selection of managers should be scrutinized carefully. The ownership of the bank should also be scrutinized so that majority owners, who have more say in how a bank is run, will be looked at more carefully. Bank regulations and information should be disclosed in a clearer manner. We need a more comprehensive risk-management system within Bank Indonesia [the central bank], which should have the ability to [investigate any] bank and impose sanctions. The bigger issue is corporate governance. People have to believe in upholding the law.

Where will you be with bank recapitalization by the end of the year?

We need to come up with 17 trillion rupiah [$2.3 billion]. What we need to do and where we will end up depends on the assets to be sold, the debt to be restructured and the loans to be placed with the [recapitalizing] bank. If we sell shares in listed companies [turned over to the government] today we should get 8 to 9 trillion rupiah. By the end of the year, we can probably get 80% of what we need. We'll meet the target.

How are your relations with President B.J. Habibie?

We don't communicate directly. We go through the finance secretary. It's better this way.

What concerns do the president's men bring up?

They ask: "When? When will you fill up [government] coffers?"

How do you answer?

"We will be able to do that."


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