Experts say country still needs the IMF<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
The role of the International Monetary Fund (IMF) to oversee the
\ncountry's economic reform program is still crucial to help
\nmaintain investor confidence in the economy, a seminar concluded
\non Wednesday.<\/p>\n
But participants of the seminar said the government had to
\nmodify the IMF's current role in such a way that the fund would
\nno longer dictate every detail of the economic reform programs
\nIndonesia needs to implement. The function of the IMF should only
\nbe limited to a monitoring role, they said.<\/p>\n
\"The recommendations of the IMF are still needed to secure
\ninvestor confidence, particularly the Paris Club,\" said Umar
\nJuoro of the Habibie Center, a private think tank, which
\norganized the seminar on Wednesday.<\/p>\n
The IMF came to Indonesia in late 1997 after the country was
\nhit by a regional economic crisis. In 1999, the government
\nextended the IMF bailout program, which will expire at the end of
\nthis year.<\/p>\n
There has been strong political pressure on the government not
\nto extend the IMF's role when the program expires, with critics
\nsaying that the IMF's prescriptions have only worsened the
\ncountry's economic woes.<\/p>\n
An immediate consequence of ending the current IMF program
\nwould be that the country could no longer obtain a debt
\nrescheduling facility from the Paris Club of creditor nations and
\nthe London Club of foreign private lenders, who have always based
\ntheir decisions on recommendations made by the IMF. Thus, this
\ncould create serious difficulties for the cash-strapped
\ngovernment to repay foreign debts maturing in 2004 and in the
\nyears to come.<\/p>\n
The government has formed a special team to explore various
\noptions if it has to conclude the existing IMF program.<\/p>\n
A source at the Ministry of Finance said that one possible
\noption was to modify the current role of the IMF. He said that
\nthe presence of the fund was still needed to maintain credibility
\nin the government's economic reform programs.<\/p>\n
Some analysts have said it was hard to imagine the country
\nhaving the discipline to carry out tough reform programs without
\na credible institution overseeing it, particularly next year when
\na general election will be held.<\/p>\n
Andrinof A. Chaniago, an economist with the Center for
\nIndonesian Regional and Urban Studies (CIRUS), said at the
\nseminar that the IMF should no longer be deeply involved in
\ndesigning all aspects of the country's economic reform programs
\nin the future.<\/p>\n
He said that the IMF's core competence was in the area of
\nmonetary policy.<\/p>\n
He said that what the IMF had done in the past by intervening
\nin microeconomic areas was a mistake. One example was the closure
\nof certain banks in November 1997, which led to massive runs on
\nbanks.<\/p>\n
\"The IMF should now only concentrate on monitoring the
\nmonetary policy,\" he said.<\/p>\n
Umar said that from the perspective of nationalism, the
\ncurrent dominating role of the IMF was unacceptable.<\/p>\n
\"It would be very difficult to convince people, especially the
\nlegislators, if they knew that the policy was dictated by a
\nforeign institution,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/experts-say-country-still-needs-the-imf-1447893297",
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