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WHAT's NewS Issue 4. April 1998
Thailand
Singapore
Indonesia
Jakarta
Indian ocean
I know of cases where a
corporate was already in real
trouble with a lender, but was
still speculating through the
treasury of the same bank.'
The sense of disbelief at
devaluation and imminent
crisis lasted even longer in
Indonesia than elsewhere. 'As
late as July 1997, economists
and even the World Bank were
still saying the country's
fundamentais were sound,'
says general manager Chris
Mol. 'And in fact, that is still
correct today. We have high
inflation, and some people are
comparing us to Latin
America, but that's a very
wrong comparison. In
countries like Argentina, the
debt generating inflation was
public. Here it is private. Six
Australia
months ago, government
spending and other numbers
were so good, this country
would have been eligible for
EMU.'
PETTY CRIME
What happened then is well
documented elsewhere. What
happens now is less clear. The
papers are still full of
Indonesia and speculation on
civil unrest, a worsening
economie situation, ethnic
violence. None of that is
overtly obvious in Jakarta
itself. The taxi drivers are just
as friendly, although like
Bangkok, there is less traffic
on the roads. People are just as
courteous, although an
increase in petty crime has not
only been registered, but is
Chris Mol, general
manager in Jakarta
increasingly apparent to
residents of the teeming capital
city. Imported goods are
harder to find, although they
are still available albeit at
hugely inflated prices. There
are less expatriates around -
estimates indicate that their
numbers will have been culled
by 50 percent within a few
months. 'This is indicative,'
says Chris Mol. 'The people
leaving the country are
involved in industries which
have been hardest hit, such as
construction. You may have
noticed there is a lot less
activity than last year when
Indonesia's F8cA industry
looked so good, so
prosperous.'
IRONY AND BUSINESS
The picture now couldn't be
more different. Talking to
Lucyanna Pandjaitan, head of
trade and commodity finance,
is tough. The phone rings
continually and each caller is
someone she would have
found very difficult to get on
the phone six months ago. 'It's
ironie,' she says, 'this is a time
of opportunity, so much so
that it's hard to know which
opportunity to follow up first.
Everybody wants to know us
now.' Everyone is, of course,
very interested in our triple-A
rating. But Lucy shrugs at the
irony. 'We set up this dedicated
structured trade finance group
last year, before the crisis,' she
says. 'I don't believe in
coincidence. This country
really needs that kind of
expertise now. But the irony is
we are restricted - with
country limits for example.
The beauty is, we become
creative. In February, we had a
special regional meeting here
to try and sort out what we
could and what we couldn't
do. Shafik Gabr of trade
finance in Utrecht, came in and
we took him to see some of the
big players here - Bulog, the
state logistics organization
among others.' The phone
rings again. It's a top guy at
Bulog. 'We're doing a rice
transaction,' she explains. 'It
was originally guaranteed by a
state bank, but the supplier
rejected their L/C, Rabo Duta
steppee! in by confirniing it.
No country risk there, but
Rabo Duta's confirmation adds
comfort. On the other side,
our Vietnam and Singapore
offices helped to structure the
deal by ensuring everything
was okay for the L/C
beneficiary as well. Like Chris
Mol says: it was a Rabo thing
to do.'
PUSHING LINES
Compared to the competition,
we are in a position to do the
Rabo thing. 'I think -
relatively speaking - we're in
better shape than most other
banks,' says head of F&A and
health care Chaidir Anwar
Sani. 'Our focus on E&A has
clearly paid off although we've
also made mistakes. The
situation generally is bad and
it will get worse. People are
struggling to service their
commitments; many will find
it an unequal struggle.' Chris
Mol mentioned the fact that
Indonesia's debt is primarily
corporate. The immense debt
was due to circumstances - the
rupiah had long been pegged
to the dollar with a 4 percent
depreciation. 'Corporates were
financing long-term assets with
short-term loans based on that
depreciation. It had been 4
percent for years. No one
could imagine that would
change - after all, Indonesia
was booming. In the heyday of
"the sky's the limit", banks
