Action against militias may help strengthen rupiah<\/p>\n
WASHINGTON (Dow Jones): Indonesia's Coordinating Minister of
\nEconomy and chief negotiator with the International Monetary Fund
\nRizal Ramli Tuesday expressed optimism that the government would
\nbring its military forces under control, a key to improving
\nconfidence in the economy.<\/p>\n
\"I do believe that with the firm action we have taken in West
\nTimor, and the firm action we have taken with respect to the
\nbombing in Jakarta, the rupiah will stabilize,\" Rizal said during
\nremarks to the U.S.-Indonesia Society.<\/p>\n
International outrage over the deaths of three United Nations
\naid workers in East Nusa Tenngara or now also known as West Timor
\nincreased the pressure on Indonesia to crack down on militias who
\nfought independence in East Timor and then terrorized refugees in
\nWest Timor. Soldiers have been implicated in the deaths of the
\naid workers and in a series of Jakarta bombing incidents.<\/p>\n
Indonesia has told the militia to disarm in three days, and
\nhas promised to use military action to enforce order. Human
\nrights groups working in West Timor say disarmament so far has
\nbeen incomplete to say the least.<\/p>\n
\"There has been a significant surrender of arms of the last
\nfew days, but I agree it is not enough,\" Rizal said. \" That is
\nwhy we are issuing a warning and will enforce that warning with
\naction,\" he added.<\/p>\n
While the rest of Asia has experienced dramatic economic and
\nfinancial recovery from the crisis which began in the region in
\n1997, Indonesia, plagued by constant political uncertainty,
\ncontinues to suffer financial market volatility. Although the
\ninternational donor community, led by the IMF and World Bank,
\nhave provided billions in financial support, implementation of
\neconomic reform programs has been spotty.<\/p>\n
Rizal, barely a month on the job, outlined a detailed plan to
\nimprove the economy and expressed optimism that President
\nAbdurrahman Wahid's new cabinet would work more cohesively and
\nsuccessfully together.<\/p>\n
\"This is important because we are in a crisis,\" Rizal said.
\nAccording to government figures, Indonesia's economy has been
\ngrowing since the second quarter 1999. The IMF program envisions
\ngross domestic product growth of 3 percent to 4 percent for 2000.
\nBut those rates are less impressive when one considers GDP
\ncontracted over 16 percent during some quarters of the recession
\nin 1998, the IMF said Monday.<\/p>\n
In its annual review of Indonesia's economy, the IMF also
\nexpressed disappointment with the pace of structural reforms in
\nIndonesia, and urged the government to speed up corporate debt
\nrestructuring. The fund also recommended Indonesia take a
\ncautious approach to extending more political control to regional
\ngovernments.<\/p>\n
Rizal said decentralization of political power is something
\nIndonesia has to accomplish to head off increasing demands for
\nautonomy of its regions and political unrest.<\/p>",
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