Australia calls for IMF sensitivity in Indonesia<\/p>\n
CANBERRA (Agencies): The Australian government, becoming
\nincreasingly concerned about its nearest neighbor's financial
\ninstability, yesterday urged the International Monetary Fund to
\nbe sensitive in its assistance to Indonesia.<\/p>\n
"We believe that the International Monetary Fund's package
\nmust be implemented with care and sensitivity towards the impact
\nof that package on social stabilities and social cohesion within
\nIndonesia," Prime Minister John Howard told parliament.<\/p>\n
Howard also said he had written to international leaders,
\nincluding U.S. President Bill Clinton, on the need to organize
\nfood aid for Indonesia, which has faced rioting over shortages
\nand soaring prices.<\/p>\n
Relations between Indonesia and the IMF have become strained
\nafter Indonesian President Soeharto was quoted on Sunday as
\nsaying economic reforms prescribed by the IMF were not in tune
\nwith the country's constitution.<\/p>\n
The IMF has delayed the payment of about US$3 billion, part of
\nthe total US$43 billion rescue package for Indonesia, until April
\nbecause of Indonesia's pre-occupation with politics as it forms a
\nnew government.<\/p>\n
The IMF and finance markets have also rejected moves by
\nPresident Soeharto to introduce a currency board to peg the
\nfalling rupiah to a fixed exchange rate.<\/p>\n
"We do understand the concern of the Indonesian government to
\nstabilize the rupiah," Howard said.<\/p>\n
"I hope that the IMF review can be quickly concluded and that
\na productive partnership between the IMF and the new Indonesian
\ngovernment can be developed as quickly as possible."<\/p>\n
Foreign Minister Alexander Downer said earlier on Monday he
\nbelieved the IMF delay was manageable, but warned of serious
\nconsequences if Indonesia and the IMF refused to co-operate.<\/p>\n
"If Indonesia were to walk away all together from the IMF, I
\nthink the economic consequences for Indonesia would be very
\nserious," Downer said.<\/p>\n
"On the other hand, I don't think it would be appropriate for
\nthe IMF just to walk away completely from Indonesia, so we do
\nwant the relationship to remain one that is in place."<\/p>\n
The IMF said on Friday a successful review of the first
\ntranche of US$10 billion was needed before the fund could hand
\nover the second tranche, originally due on March 15.<\/p>\n
It said the review would not be discussed until April.<\/p>\n
Howard said he had written to international leaders urging
\nfood aid support for Indonesia.<\/p>\n
"Over the past two weeks I've discussed the matter with the
\nPrime Minister of Singapore (Goh Chok Tong) and with the
\nPresident of the World Bank (James Wolfensohn), particularly in
\nthe context of organizing food aid for Indonesia," Howard said.<\/p>\n
"I've also written again on the subject to President Clinton,
\nthe Prime Minister of Japan Mr Hashimoto and also to President
\nSoeharto himself."<\/p>\n
Howard said his treasurer, Peter Costello, had also been in
\ncontact with IMF managing director Michel Camdessus over the
\nIndonesian rescue package.<\/p>\n
Australia has contributed US$1 billion to the package and late
\nlast month began talks with Indonesia about an emergency food aid
\nprogram.<\/p>\n
Australia said yesterday it will underwrite up to US$380
\nmillion (US$253 million) in wheat exports to Indonesia to help
\nfeed its people as the IMF delayed bailout funds for the stricken
\nAsian giant.<\/p>\n
Prime Minister John Howard told parliament that the exports
\nwould be guaranteed through the government's Export Finance
\nInsurance Corporation (EFIC) in a move which he said would
\nbenefit both Australia and Indonesia.<\/p>\n
"It will secure Australian jobs, but it will also be of
\nbenefit to the ordinary people of Indonesia," Howard said.<\/p>\n
Australia agreed in January to underwrite exports to Indonesia
\non a case by case basis because of what it saw as bid by U.S.
\nexporters to exploit the crisis by grabbing traditional
\nAustralian markets for agricultural products.<\/p>\n
But the latest move comes amid fears that Indonesian buyers
\nwill be unable to meet payments because of the plunging
\nIndonesian rupiah.<\/p>\n
Japan warns<\/p>\n
Meanwhile, Japan warned yesterday it may reconsider aid to
\nIndonesia if the government fails to abide by the IMF reform
\npackage to revive its economy, a vice trade minister said.<\/p>\n
"The IMF framework is right in its direction," Vice
\nInternational Trade and Industry Minister, Osamu Watanabe, told a
\nnews conference.<\/p>\n
"Japan may find it difficult to provide assistance," if
\nIndonesia fails to commit itself to the reform program, he
\nwarned.<\/p>\n
Indonesia has already received about three billion dollars
\nfrom the IMF under a $43 billion international rescue package
\naimed at restoring confidence and stability to its markets and
\neconomy.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/australia-calls-for-imf-sensitivity-in-indonesia-1447893297",
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"sponsor": "Okusi Associates",
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