Antonio David/Akil Abduljalil
Phone: (62-21) 252-6152
Fax: (62-21) 252-2438
Mark Constantine
Phone: (202) 473-9331
Fax: (202) 974-4384
E-mail: Mconstantine@ifc.org


JAKARTA, INDONESIA, Feb. 8—Mr. Assaad Jabre, Vice President of the International Finance Corporation (IFC), was in Indonesia all of this week to assess first-hand the impact of the recent financial crisis on Indonesian private sector enterprises, including IFC's clients. The IFC team also included Rashad Kaldany, Director, Asia Department, Hany Assaad, Manager, Asia Capital Markets and Antonio David, IFC's Resident Representative in Indonesia. IFC is the private sector arm of the World Bank Group.

The current crisis in Indonesia's currency and capital markets has adversely impacted the operations of the Indonesian corporate sector, including those of fundamentally viable and internationally competitive enterprises. Several teams of IFC staff are currently in Indonesia, or will be visiting shortly. These teams are reviewing the performance of IFC's existing investments, on a case by case basis, to assess their liquidity requirements and their capacity to meet debt service obligations. IFC has existing loan and equity investments in 42 Indonesian companies for a disbursed amount totaling US$1.1 billion, of which about US$550 million is comprised of loans from international participant banks.

"We have a long-term commitment to Indonesia," said Jabre. "Our priority at this time is to establish how best to assist and support our client companies which are facing temporary liquidity problems. The objective is to help ensure their long term viability while protecting the interests of the creditors. We intend to undertake this effort in close consultation with our participant banks and other creditors."

IFC has welcomed the initiative announced by the Indonesian authorities on January 27, 1998 as an important step to help resolve the external debt problem of the Indonesian corporate sector. In particular, IFC has endorsed the fundamental principles on which this initiative is based -- namely, that the debt renegotiations are voluntary and subject to mutual agreement between borrowers and creditors, and that sound companies which are able to service their foreign debts should do so.

"IFC's approach to resolving the debt service problems which some of our clients are experiencing is to work directly with them on a case by case basis. This is fully consistent with the Government's initiative. We have discussed our approach with senior Indonesian Government officials and Dr. Radius Prawiro, Chairman of the Corporate Debt Team, and we have their full support. We are particularly pleased that Dr. Prawiro has identified our approach as an example of best practice. We intend to keep Dr. Prawiro fully informed about the progress of our restructuring efforts," added Mr. Jabre.

Mr. Jabre also clarified that, as a matter of general practice, IFC discloses to the Indonesian authorities, as well as the public, the names of IFC clients in Indonesia and the amounts that have been provided by IFC to these clients. A complete list of IFC investments in Indonesia can be found in IFC's 1997 Annual Report.

IFC is also actively looking at ways to support other private sector companies which have been affected by the crisis, including agribusiness, export-oriented industries and the financial sector.