deals
Indonesia - trading solution
New publications
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Sustainability
Final comments
Wh at S NewS Issue 10' December 1999 I
In the wake of the Indonesian crisis, a
number of schemes have been intro-
duccd by a variety of players to help the
struggling economy, and especially its ex
port earners. Most have been less than
successful, in spitc of considerable public-
ity, because they fail to tackle corporate
risk. This has led to a situation where in
ternational banks are reluctant to take In
donesian country and corporate risk. 'So,'
says Mauk Faber of global structured
trade finance, 'when it comcs to finding
banks willing to issue L/Cs, exporting
manufacturing companies with high re-
liance on imported raw materials face ma
jor problems.' In a move to facilitate the
export trade crucial to getting the Indone
sian economy back on its fect, Rabobank
International got together with the World
Ranks International Finance Corporation
(IFC) and the Netherlands Development
Finance Corporation (FMO) to arrange a
USD 120 ntillion credit facility for short
term trade finance of Indonesian export
actitivies. The related risk is shared
cqually (USD 40 million) by the thrce
players who signed the agreement in
Utrecht on 10 December. This will be the
A whole new range of publications on
the world food retail markets was
publishcd to coincide with the global
F&A conference held in Paris in carly
September. How your office benefits
front the huge marketing and PR
success of the conference depends on
how you handle your follow up - not
only to participating clients, hut
primarily to those who were unable
to attend. We wanted to remind you
that therc a number of tools and
first IFC transaction with Indonesia since
the recent elections.
The credit facility is designed to support
export oriented Indonesian companies
which generate income from hard curren-
cies. These corporates can arrange fund-
ing for the import of (raw) materials nec-
essary for their export production. In
addition, they can also arrange prc-fi-
nance for exports and the availability of
working capital for local purchasing.
Last month's product news and deal
pages were memorable, not least for
the editors' ability to leave people out
and fail to fit names to faces - let's sec
if we can get it right this time. The
CANFAS deal should have included
Martine Boon, Licsbeth de Schutter
and Louise Derbes. Our picture of the
forfaiting team should have read:
Richard Whiting (left), Paul Panders
(right) - wc did manage to get Gayle
Fisher right.
materials available to help support
your follow up:
The Global Food Supply and Retail
Conference summary (copies will be
sent to participants automatically);
The World Food Markets
market study;
The fight for stomach share
special report;
and World Food Markets Map.
To order or for more information,
call Marketing on 51 30 216 2S04.
Credit facilities are granted for 180 days
only. This means that initially a quarter of
a billion US dollars will be made available
annually to support Indonesian exports.
The facility could be increased to USD
140 million depending on demand.
In order to spread risk, Rabobank
Singapore will act as facility bank, with
Rabobank Duta Indonesia as agent and
relationship manager. The IFC guarantees
the funds made available by Rabobank
Singapore. Counter guarantees of
USD 40 million each have been given to
the IFC by both the Rabobank Group
and the Dutch Development Finance
Corporation. All three partners will coop-
erate in selecting Indonesian companies
eligible for this funding. Rabobank Duta
Indonesia and Rabobank Singapore will
share responsibility for credit line control.
Says Faber, 'Our people in Jakarta will,
of course, be looking to use the
facility primarily to support food and
agribusiness companies.'
>- Continued from page 3
The key macroeconomic issues in the
medium term concern the sustainability of
the massive budget deficits combined with
low interest rate policies that were used to
jumpstart the economies of Japan, East
Asia, and other nations in the developing
world. 'To the extent that domestic struc-
tural reform proceeds slowly and un-
evenly, the self sustained economie growth
momentum in these countries is yet to be
assured,' the forecast said.
Finally, in an observation of both immedi-
ate and long term importance, the forecast
addressed the apparent failure of the re
cent World Trade Organization meeting in
Seattle to launch a new round of trade lib-
eralization. The meeting drew diverse
civic groups concerned about the
perceived negative effects of globalization
and commercial and financial liberaliza-
tion. 'Unless the governments and
business community better address the
legitimate concerns and articulate the
reality and potential benefit of globaliza
tion' writes RI's chief economist
Hung Q. Tran, 'the intellectual back
ground to economie policy making may
tilt back toward protectionism which
could threaten the foundation of the
growth dynamism of the world economy.'