Billions of dollars from Mid-East to enter Indonesia

Billions of dollars from the countries in the Middle East are ready to enter Indonesia in 1999, Indonesian news agency Antara reported.

Antara quoted President of PT Danaresksa Fund Management Iwan P Pontjowinoto as saying on Tuesday that the funds will be used especially for financing institutions applying the syariah (profit sharing) principle.

"We have discussed the matter in November 1999. In January and February 1999 they may complete their evaluation, so that the funds may enter the country in August-September," he said.

He said following a seminar on the funding of housing construction, that some of the money may be invested in conventional banks.

He would not elaborate on the amounts, because the matter was still being discussed. "But more important is that they are very keen, and have invited us," he said.

One of the conditions that Indonesia has to meet, he said, is that the government must use a free foreign exchange regime to enable them to immediately transfer their money in case of a political change in the country.

But if Indonesia also exercises control of foreign exchange, such as in Malaysia, they will think twice, he said.

They also wished for a transparent management of the funds, he said, adding that they also required the government to apply the syariah principle giving the public the widest benefits.

The funds will also be used in the housing sector, as funds had become difficult to obtain, especially house ownership credits in view of the current crisis, he said.