Australia's RBA urges fast aid for Indonesia<\/p>\n
SYDNEY (Reuters): The Reserve Bank of Australia said yesterday
\nthe Indonesian situation was now so desperate that immediate
\npressure for structural reform had to be set aside for emergency
\nmeasures.<\/p>\n
In a speech peppered with medical allusions, deputy RBA
\ngovernor Stephen Grenville argued the patient was so near death
\nit was time to refocus the reform effort on the core economic
\nissues -- the exchange rate, foreign debt and rebuilding the
\nfinancial sector.<\/p>\n
\"To be sure, reform in the structural issues of governance is
\neminently desirable, but what is needed now is the kind of triage
\nwe see in an emergency room -- sorting the life-saving critical
\npriorities from longer-term issues,\" he said.<\/p>\n
Since Australia was Indonesia's next-door neighbor the stakes
\nwere higher for it than for the United States and other countries
\nto see a resolution of the economic crisis, he said.<\/p>\n
Indonesia is battling its worst economic crisis in decades and
\nreforms agreed with the International Monetary Fund in exchange
\nfor a bail-out package of more than $43 billion have not been
\neffective amid perceptions that Jakarta is dragging its feet on
\nimplementing the agreement.<\/p>\n
Australia has pledged US$1 billion to the package.<\/p>\n
\"Our aim was not to capitalize on any of these countries'
\ndifficulties in order to bring about a political transformation,\"
\nMacfarlane said.<\/p>\n
\"Whatever the details that are finally worked out, there can
\nbe little doubt that the overwhelming priority is to roll over,
\nreschedule, restructure existing debt or do whatever else is
\nnecessary to prevent further capital outflow,\" he said.<\/p>\n
The blunt warnings distanced Australia from most other western
\neconomies which were demanding Indonesia stick to the strict
\nreform guidelines set by the IMF.<\/p>\n
\"It does seem the RBA is leaning toward the concept of an IMF-
\nplus package which Indonesia has floated, which puts
\nstabilization of the rupiah above everything,\" said Richard
\nGibbs, an international economist at Macquarie Bank.<\/p>\n
Rescue funds<\/p>\n
Meanwhile, a spokeswoman for Treasurer Peter Costello said in
\nCanberra yesterday the Australian government would disburse its
\nUS$1 billion in aid funds to Indonesia once the overall IMF
\npackage was accepted by the government of President Soeharto.<\/p>\n
The spokeswoman said reports on some wire services that
\nAustralia was withholding the payment were incorrect as the
\npayment had always been linked to acceptance of the IMF package.<\/p>\n
\"This is a normal practice. He (Costello) has said
\nconsistently that it's contingent on Indonesia implementing the
\nIMF package,\" she said.<\/p>\n
In other development, a diplomatic source in London said on
\nWednesday, Japan will urge Indonesian Soeharto this weekend to
\nadopt International Monetary Fund measures in effort to ensure
\nAsia's economic crisis does not turn into a political crisis,<\/p>\n
Earlier on Wednesday Japan announced that Prime Minister
\nRyutaro Hashimoto will travel to Indonesia this weekend for talks
\nwith President Soeharto about the country's economic crisis.<\/p>\n
\"Mr Hashimoto will convey the expectation of the Japanese
\ngovernment that Indonesia should implement the IMF program, and
\nat the same time make it clear that the Japanese government
\ncontinues to support reform efforts by Indonesia\" the diplomatic
\nsource said.<\/p>\n
Meanwhile, Thailand's Prime Minister Chuan Leekpai said in New
\nYork on Wednesday there is no alternative source of funding for
\nIndonesia but the IMF.<\/p>\n
\"There are no other alternative resources of funds able to
\nassist Indonesia, apart from that available to the IMF,\" Chuan
\ntold the Council on Foreign Relations.<\/p>\n
\"It is essential for the IMF to assist Indonesia and, at the
\nsame time, it is essential for Indonesia to receive and to
\nwelcome IMF support,\" Chuan also said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/australias-rba-urges-fast-aid-for-indonesia-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}