Malaysia is open to buying assets managed by the Indonesian Bank Restructuring Agency (IBRA) if such investments are viable, Prime Minister Dr Mahathir Mohamad said in remarks published today.

Mahathir, who is also finance minister, said all investment decisions would be made prudently.

"Well, they are selling their assets to foreigners and we are foreigners to them, so I think we are entitled to buy if we want to," he was quoted as saying by the New Straits Times .

"But I think that it must be prudent. You can't just go in and buy things that will not give any returns."

The newspaper said Deputy Prime Minister Abdullah Ahmad Badawi, who is in Jakarta for a three-day visit, was expected to deliver some good news to the Indonesian government.

Indonesian Vice President Hamzah Haz last week urged local entrepreneurs to form partnerships with Malaysian businessmen to buy the IBRA bank loan assets.

Budget shortfall

IBRA on Monday launched the sale of bank loan assets worth 150 trillion rupiah (17 billion dollars) in an attempt to help cover the government's budget shortfall.

It controls assets with a face value of tens of billions of dollars after a shake-up of the banking industry and the corporate world after the 1997-1998 Asian financial crisis.

The government is counting on IBRA asset sales to generate 19.5 trillion rupiah this year to help meet an estimated budget deficit of some 42 trillion rupiah - equivalent to 2.5 percent of gross domestic product.