Govt, IMF meet to salvage economic pact<\/p>\n
JAKARTA (JP): The government and International Monetary Fund
\nofficials will start their meeting here today to get a massive
\neconomic rescue plan back on track.<\/p>\n
IMF Asia-Pacific director Hubert Neiss, who arrived here
\nyesterday, said he would meet President B.J. Habibie, economic
\nministers and opposition figures.<\/p>\n
The chairman of the National Development Planning Board,
\nBoediono, said economic ministers led by Coordinating Minister
\nfor Economy, Finance and Industry Ginandjar Kartasasmita would
\nhave a meeting with Neiss today.<\/p>\n
\"Indonesia will present its macroeconomic policies and the
\nresults amid the uncertainty following the recent political
\nunrest,\" Boediono said.<\/p>\n
Neiss told journalists upon his arrival at Soekarno-Hatta
\nAirport that some of the macroeconomic assumptions underlying the
\nIMF's agreements with Indonesia would have to be revised because
\nof the effects of recent political turmoil.<\/p>\n
The last assessment made by the IMF and the government
\nforecast an inflation rate of 45 percent this year, a rupiah-U.S.
\ndollar exchange rate of Rp 6,000 and gross domestic product of
\nminus 5 percent.<\/p>\n
Some economists have projected that inflation could near 100
\npercent this year and economic growth could shrink by 10 percent.
\nThe rupiah is currently above 10,000 against the U.S. dollar.<\/p>\n
\"The macroeconomic part and various assumptions will have to
\nbe changed and revised,\" Neiss said.<\/p>\n
Asked when IMF loan payments would be resumed to Indonesia,
\nNeiss replied: \"It's too early to say. After making an assessment
\nI will report back to Washington and then further decisions will
\nbe made on how to proceed.\"<\/p>\n
Neiss said Indonesia's immediate priorities were to get the
\neconomy moving as quickly as possible, prevent hyperinflation and
\nsave the banking system from collapse.<\/p>\n
Earlier this month, the capital was rocked by a wave of
\nstudent protests and mass rioting which left at least 500 dead
\nand 56 missing. The violence helped force the resignation of then
\npresident Soeharto and derailed a US$43 billion IMF package.<\/p>\n
\"We have to recognize that the economic measures will only
\nwork if there is also political stability,\" Neiss told AP.<\/p>\n
Indonesia has been hardest hit in an Asian financial meltdown
\nthat has affected nations including South Korea, Malaysia and
\nThailand.<\/p>\n
The rupiah has plummeted while inflation and unemployment have
\nsoared in Indonesia, adding to the resentment of Soeharto that
\nhelped oust him.<\/p>\n
The new government under President Habibie has said it is
\ncommitted to making big changes to accommodate IMF demands.<\/p>\n
Habibie has also committed himself to major political reform,
\nincluding the release of political prisoners and early elections.<\/p>\n
\"It is important that the trust of the Indonesian people (in
\nthe new government) is being restored, and support from foreign
\ngovernments is obtained and that the confidence of the market
\nreturns,\" Neiss said.<\/p>\n
Under Soeharto, several attempts by the IMF to bail out the
\neconomy stalled because of the former leader's reluctance to
\ncarry out tough reforms that would cut across the business
\nempires of his multimillionaire children.<\/p>\n
Soeharto's six children and a small clique of associates made
\nfortunes under his patronage through a web of government
\ncontracts, state-approved monopolies and subsidies. (rei\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-imf-meet-to-salvage-economic-pact-1447893297",
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"sponsor": "Okusi Associates",
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