- Discover Indonesia Online

You are currently in > Just a blog about Indonesia > BRI has people queuing

BRI has people queuing JAKARTA - If there remains a lack of confidence in Indonesia’s economy, no-one told the “huge crowd” that queued for a slice of the initial public offering of Bank Rakyat Indonesia (BRI) on Thursday (23/10/03). The Jakarta Post noted that very little noise has been made about the float, but word has clearly got around that, of all the banks on the market, this is the one that is producing the goods.
BRI will sell 30%, or more likely, 45% of its stock to the public if demand is strong enough, and it clearly is. BRI’s portfolio is different to most banks. Corporate customers make up only 15% of its loans, with the remainder of its non-consumer loans going to small and medium enterprises and particularly to the ‘micro’ sector. This last group of loans, averaging around Rp50 million, have shown a non-performing loan ratio under 3%, and have the added benefit of returning higher rates of interest than other types of credit.
Add to that the bank’s enormous grassroots network, consisting of modest branches and even more low-key ‘units’ that are little more than a hole in the wall, and the bank adds up to enormous potential for anyone who believes there’s hope for the Indonesian economy. And while the government decided it didn’t like the look of the bidders for Lippo Bank, BRI looks certain to put a solid contribution into Treasury to meet the budget deficit.
Those who queued up for some BRI shares obviously were not readers of The Economist. It took a rather more negative view of Indonesia’s prospects in an article with the catchline “When FDI means foreigners ditching Indonesia”. The magazine has always been well known for its poisoned spleen but there is reason behind its acid. The Kaltim Prima Coal saga, for instance, in which two of the world’s foremost mining companies, Rio Tinto and BP, cut and ran.
”The two British multinationals thought they were experienced enough to be able to take care of themselves, but they were still outmaneuvered in a country where corruption, shifting political priorities and an unreliable legal system make it difficult to do business.” Cemex, the Davidoff trademark case and legal uncertainty in general add to the weight of The Economists’ argument. “Alarmingly, even Dorodjatun Kuntjoro-Jakti, (Coordinating) Minister for Economic Affairs, readily reels off reasons why investors remain wary,” it states.
All the doubt is reasonable, but it also does not necessarily negate the possibility that those who dare to play the Indonesian game could come out winners. Hilmi Panigoro, CEO of home-grown oil mover Medco, in an interview with the Post at the beginning of last week, made the point that the lack of interest from foreign companies was an enormous opportunity for local operators. Back at the coal face, Bank Indonesia notched the benchmark Sertifikat Bank Indonesia (SBI) one-month paper up the line to 8.53% from 8.51% while Deputy Governor Hartadi A. Sarwono warned of a spin-off on the Indonesian currency of a trend to higher global inflation.
Bank Indonesia then confused the picture by cutting another major indicator, the overnight money market rate, or FASBI, by 25 basis points to 8.25%. Industry and Trade Minister Rini M.S. Soewandi was happy to be able to point to a rosy future for the country’s non-oil and gas exports, saying a 7% rise next year should be feasible, while at the same time concern continues over the prospects of the textile industry and its millions of workers with the end of the US quota system.
The thousands of Texmaco workers who blocked Jakarta’s Jl. Sudirman last week may have been the prospect of more to come in that area. Rubbing salt into the wound, the World Bank put Indonesia on warning that it must account properly for the loans it receives and not allow them to be frittered away in corruption. In a 127-page report released Monday (20/10/03), the bank said pervasive corruption in nearly every aspect of Indonesian society poses “a significant threat” to efforts for a more prosperous future.
"The choices facing Indonesia's leaders are stark," the report concluded. "Failure to act decisively to strengthen accountability and the rule of law could have serious adverse long-term consequences for Indonesia's political and economic stability," it warned. All of which makes the casual observer wonder why people are queuing to buy bank shares, and rushing out to spend their money on cars and motorbikes. Maybe, just maybe, the factors such as the World Bank mentions have already been factored in by the man (and woman) on the street, and the conclusion remains that there’s room for optimism.
Optimism or not, the government does need to act on the very valid points of criticism. In the long run, large and resilient as its economy may be, it cannot continue to act as if the rules just do not apply to Indonesia.

Posted in General @ 27 October 2003 00:03 CET by Jeroen · 'Blog' RSS feed · permalink

There are no reactions on this blog entry yet. Be the first one to give a reaction here!

Log in to write a reaction

You are not logged in to the website. You have to be logged in to write a reaction on this blog entry.

· If you already have an account, please login.
· If you have lost your password, please retrieve it.
· If you don't have an account yet, you can create one.

Add this blog entry to your email, your own blog, MySpace, Facebook, or whatsoever via AddThis:
Bookmark and Share

e-mail updates for this blog article

Login if you want to receive emails for reactions on this blog entry. You will receive an update as soon as a reaction on this blog entry is posted.

Your website for tickets in Indonesia!
Looking for e-tickets for flights in Indonesia? Here's your solution! Order your e-tickets at
· 2015, 28 entries
· 2014, 591 entries
· 2013, 750 entries
· 2012, 1061 entries
· 2011, 792 entries
· 2010, 644 entries
· 2009, 916 entries
· 2008, 504 entries
· 2007, 725 entries
· 2006, 1014 entries
· 2005, 723 entries
· 2004, 558 entries
· 2003, 525 entries
· 2002, 375 entries
· 2001, 162 entries
· gigolo
· jakarta
· blogger
Automatically generated every hour
· General (1205 entries)
· Economy (643 entries)
· Politics (574 entries)
· Accidents (561 entries)
· Terrorism (541 entries)
· Earthquake (539 entries)
· Volcanoes (387 entries)
· Crime (357 entries)
· Corruption (349 entries)
· Flooding (278 entries)
· Elections (276 entries)
· Travel (268 entries)
· Bird Flu (254 entries)
· Religion (242 entries)
· Tourism (239 entries)
· Oddly enough ... (219 entries)
· Violence (198 entries)
· Drugs (196 entries)
· Health (192 entries)
· Aceh conflict (191 entries)
· Environment (185 entries)
· Weather (171 entries)
· Military (168 entries)
· Protests (157 entries)
· Culture (106 entries)
· Garuda Indonesia (91 entries)
· C. Sulawesi conflict (86 entries)
· Human rights (82 entries)
· Forest fires (78 entries)
· Sidoarjo mudflow (71 entries)
· Power supply (64 entries)
· Ramadan (63 entries)
· PT Freeport (55 entries)
· Picture guess (48 entries)
· Maluku conflict (47 entries)
· Dengue Fever (37 entries)
· History (37 entries)
· Infrastructure (36 entries)
· Polio (35 entries)
· Mexican flu (35 entries)
· Website (25 entries)
· Media (22 entries)
· Nuclear power (21 entries)
· Sports (20 entries)
· Sexy (16 entries)
· SARS (15 entries)
· Nightlife (10 entries)
· Others (5 entries)
· Lippo Cikarang (5 entries)
· Close smallest categories
EUR-IDR: 16,590 · 16,620  The Rupiah rate declined since yesterday
@ 17 May 2018 18:12 CET
JPY-IDR: 126.83 · 126.95  The Rupiah rate improved since yesterday
@ 17 May 2018 21:58 CET
MYR-IDR: 3,545 · 3,549  The Rupiah rate declined since yesterday
@ 15 May 2018 08:42 CET
SGD-IDR: 10,479 · 10,501  The Rupiah rate declined since yesterday
@ 07 May 2018 07:48 CET
THB-IDR: 439.14 · 439.41  The Rupiah rate declined since yesterday
@ 16 May 2018 09:18 CET
USD-IDR: 14,097 · 14,157  The Rupiah rate declined since yesterday
@ 17 May 2018 00:46 CET
Go to 'exchange rates' 
·  At 03 March 2021 07:43 hotwin reacted on Three more bodies of AirAsia victims to Surabaya hospital
·  At 10 November 2020 16:59 AdvocaatHulp reacted on Three more bodies of AirAsia victims to Surabaya hospital
·  At 14 July 2020 08:32 newnight reacted on Three more bodies of AirAsia victims to Surabaya hospital
·  At 20 September 2018 06:54 erik12 reacted on Fuel prices lowered, again
·  At 19 October 2015 17:17 imambudianto5 reacted on Bank Indonesia maintains benchmark interest rate at 7.75%
·  At 04 March 2015 19:18 merdekaSah reacted on Alleged terrorists shot dead three villagers in Poso
·  At 04 March 2015 13:11 Yogya-Bali reacted on Alleged terrorists shot dead three villagers in Poso
·  At 26 February 2015 13:02 Irena reacted on Sexy, a young woman with candy
·  At 08 May 2014 09:51 jstar reacted on No alcohol should be sold in warung
·  At 01 May 2014 10:07 jstar reacted on Indonesia to be among the top 10 peacekeeping contributors
·  At 27 March 2014 05:50 harlys reacted on PPP leader voices concern over Islamic parties' future
·  At 10 March 2014 06:11 Yogya-Bali reacted on Sriwijaya Air leaves behind 200 passengers at airport
·  At 09 March 2014 00:11 Yerun reacted on Sriwijaya Air leaves behind 200 passengers at airport
·  At 08 March 2014 20:33 nicknick reacted on Sriwijaya Air leaves behind 200 passengers at airport
·  At 18 February 2014 04:17 Yerun reacted on Ash from Mount Kelud eruption spreads over all of Java
·  At 16 February 2014 05:41 Amed East Bali reacted on Ash from Mount Kelud eruption spreads over all of Java
·  At 14 February 2014 22:27 Anne Mieke reacted on Asylum seekers in Medan wish to be sent to Australia
·  At 14 February 2014 22:22 beritaislam reacted on Asylum seekers in Medan wish to be sent to Australia
·  At 16 January 2014 15:37 Anne Mieke reacted on Landslides cut off Tomohon-Manado road
·  At 16 January 2014 15:21 Yerun reacted on Landslides cut off Tomohon-Manado road
Go to 'forum topics' 

Created by · feedback & contact · © 2000-2021
Other websites by · · ·

Valid HTML 4.01 Transitional 153,342,802 pageviews Discover Indonesia Online at