Govt denies IMF dictated reform package content<\/p>\n
JAKARTA (JP): The government has denied accusations that it
\nallowed the International Monetary Fund (IMF) to dictate the
\ncontent of last week's economic reforms in return for the US$43
\nbillion international rescue package.<\/p>\n
The State Minister of National Development Planning, Ginandjar
\nKartasasmita, told reporters Saturday that the 50 points
\ncontained in the memorandum given to the IMF were all in line
\nwith the government's intentions for the economy.<\/p>\n
Indonesia, he said, was benefiting from the experience and the
\ninternational reputation of the IMF in handling similar economic
\ncrisis in other countries.<\/p>\n
\"If the IMF is convinced about the reform plans, then it would
\ninfluence sentiments in the global financial markets,\" he said.<\/p>\n
Ginandjar said Indonesia was not the only country to have
\naccepted a bitter IMF prescription, noting South Korea and
\nThailand were among its most recent other patients.<\/p>\n
\"That's the normal procedure. When a country is seeking
\nassistance, the IMF will spell out its terms, before giving
\nassistance,\" he said.<\/p>\n
President Soeharto signed a letter of intent Wednesday and
\ndelivered it to IMF managing director Michel Camdessus. He
\npledged to carry out sweeping economic reforms that include
\ndismantling business monopolies and cartels, eliminating most
\nfuel subsidies and opening up more of the economy to foreigners.<\/p>\n
Some politicians are wary that by agreeing to the tough
\neconomic terms, such as the elimination of subsidies, the
\ngovernment virtually yielded its sovereignty to the IMF, and
\nsacrificed the interests of the people.<\/p>\n
But Ginandjar said the IMF had no political motives in setting
\nits terms. \"After learning the terms, the President felt they
\ncould be carried out,\" he said.<\/p>\n
Soeharto also has to revise the government's draft budget for
\nthe 1998\/99 fiscal year, which he had presented to the House of
\nRepresentatives on Jan. 6, in view of these reforms.<\/p>\n
Ginandjar said the draft would have to be revised quickly,
\nbefore March, before being presented to the House once again.<\/p>\n
The draft budget for the fiscal year starting April 1 will
\nhave to be passed by the House.<\/p>\n
The original budget called for expenditure of Rp 133.5
\ntrillion, up by 32 percent from the current fiscal year. It was
\ncalculated on the basis of an exchange rate of Rp 4,000 to the
\ndollar, an inflation rate of 9 percent and a 4 percent economic
\ngrowth rate.<\/p>\n
These assumptions were regarded as ambitious by the IMF.
\nSoeharto agreed to change them, altering the budget to an
\nexchange rate of Rp 5,000 to the U.S. dollar, 20 percent
\ninflation and zero economic growth.<\/p>\n
Soeharto also said that by IMF calculations, the budget would
\nhave a deficit equivalent to 1 percent of the country's gross
\ndomestic product, but the shortage would be covered by foreign
\naid, and not by domestic borrowings.<\/p>\n
By law however the government cannot run a deficit in its
\nbudget. (prb\/09)<\/p>\n
Editorial -- Page 4<\/p>\n
Emil -- Page 12<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/govt-denies-imf-dictated-reform-package-content-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }