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may have the will to reform but not the way (it continues to require outside funding from businesses it owns or is a partner in). And in the final analysis this may be what Indonesia and the world can look forward to, not what many were hoping for. Perhaps expectations have been too high.

        In my opinion Wahid's soft approach to reform is characterized by:

	Law reform rather than prosecution
	Reconciliation rather than justice
	Negotiated solutions to separatist movements rather than military solutions.
	Continual compromise on policy with "old regime" political elites as well as new religion-based nationalists
	Infatuation with populist over rational economic policies
	Minimal use of the state apparatus and "bully pulpit" to solve conflicts

          If Gus Dur had stronger institutions such as a competent and independent judiciary with prosecutors experienced at bringing cases before a court, perhaps he could count on them and set his reforms on a "harder" course.  If political parties didn't need money from conglomerates to finance future campaigns, perhaps they would more readily accept and push for IBRA asset sales and tougher terms for bankrupt businessmen.  If he could trust the military, perhaps he would allow them more of a hand to establish minimal law order in Aceh, Irian Jaya, and the Moluccas.   If his own political base was stronger, perhaps he could resist the machinations of Amien Rais, and other political leaders who ebb and flow with their support of his actions and policies.  Strangely echoing the 1950's, Indonesia's bickering political parties lack a political center around which a national reform consensus could be formed.  With Pancasila (5 unifying principles) currently discredited because of its restrictive interpretation under the New Order and Sukarno's blend of nationalism, religion, and communism (nasakom) a distant relic, nothing else has yet emerged to muffle today's politics of emotion.

         But finally, it may be that too much confrontation, a "hard" reboot, would be even more destabilizing than the current state.  We should all be prepared for and adjust to the "muddle".  Good business and good relations can still be conducted.

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BANKING AND FINANCE

DOORS REOPEN FOR NEW FINANCING FIRMS

               The government said yesterday it has reopened he doors for new financing companies, which had been closed since 1995.   "Regulations governing the financing sector have also been improved to make them more comprehensive and able to keep up with developments of this sector," Finance Department spokesman Hadiyanto said in a statement.  Indonesia allows four types of financing firms: leasing, factoring, credit card business, and consumer financing.  A financing firm can take the form of a limited liability company or a cooperative.   To establish a financing company, minimum paid-up capital for a national private company is set at Rp10 billion, a joint venture company Rp25 billion and a cooperative Rp5 billion.  Foreign ownership is set at 85% at the most.  Financing companies are prohibited from raising funds directly from the public, be it in the form of giro, deposits or savings.   They are also not allowed to issue promissory notes or provide any kind of guarantee to other parties.
Financing companies are obliged to present monthly reports, quarterly activity reports and an audited annual financial report. Expected approval time for new applications is 60 days.   Indonesian Observer, 11/8/00

NEW IBRA CHIEF
     Indonesia has appointed a former treasurer of Citibank as head of the country's most powerful financial institution, in a move likely to cheer financial markets. Edwin Gerungan, director at Bank Mandiri and former country treasurer at Citibank, is to replace Cacuk Sudarijanto as head of the Indonesian Bank Restructuring Agency (IBRA) who is now junior minister for economic restructuring.

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