Govt must reduce dependency on donors<\/p>\n
Ahmad Junaidi and Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
The People's Consultative Assembly (MPR) Commission B asserted
\non Thursday that it was not seeking to terminate Indonesia's
\nrelationship with the International Monetary Fund (IMF), but for
\nthe government to improve its bargaining position in dealing with
\ndonor agencies.<\/p>\n
Commission members also clarified earlier reports that the
\nAssembly had plans to recommend that Indonesia end the
\nrelationship. Several factions, however, had asked that
\ntermination of the contract with the IMF be specifically put in
\nthe draft economic recovery decree being deliberated by
\nCommission B.<\/p>\n
\"We are a member (of the IMF), therefore, we can't quit our
\nmembership. We have the right to benefit from the IMF's
\nassistance,\" commission member Faisal Baasir told reporters on
\nthe sidelines of a plenary session on Thursday.<\/p>\n
Faisal said the commission underlined the need for Indonesia
\nto improve its bargaining position with regard to donor agencies,
\nincluding the IMF.<\/p>\n
Initially, Indonesia's loan contract was due to expire this
\nyear but the government decided late last year to extend the
\ncontract until 2003.<\/p>\n
Syamsul Balda, another member of Commission B from the Reform
\nfaction, said it would push for a termination of the contract
\nwith the IMF when it expired.<\/p>\n
\"We don't want to extend the contract with the IMF because it
\nhas not brought improvements to our economy,\" he said, adding
\nthat Indonesia must reduce its dependency on the IMF.<\/p>\n
The termination of the IMF contract has become a hot issue at
\nthe Assembly's Annual Session. State Minister for National
\nDevelopment Planning Kwik Kian Gie has been among those favoring
\nthe contract's termination.<\/p>\n
Many legislators have given support to the proposal, saying
\nthe IMF prescription to improve the economy was not working.<\/p>\n
The draft economic recovery decree is being debated at the
\nCommission B plenary session. On Wednesday, the six-member
\ndrafting team discussed a recommendation for the government to
\nreview relations with donor agencies, with options ranging from
\ncorrecting imbalanced positions to cutting ties with the IMF.<\/p>\n
However, in the final draft, the team decided to only
\nrecommend a review of government policy on donor agencies to
\nimprove its bargaining position. The final draft does not mention
\nthe names of the donor agencies.<\/p>\n
\"We don't want to strain our relationship with the IMF,\"
\nFaisal said.<\/p>\n
Indonesia joined the IMF in 1967. However, it was not until
\nthe economic crisis in 1997 that Indonesia decided to ask for IMF
\nassistance.<\/p>\n
The government of President Soeharto signed the first Letter
\nof Intent along with the Memorandum of Economic and Financial
\nPolicies (MEFP), which consisted of 48 programs, on Oct.31, 1997.<\/p>\n
Initially, President Soeharto was reluctant to ask for IMF
\nassistance for fear it would negatively affect his children's and
\ncronies' businesses. However, as the economy continued
\ndeteriorating and the rupiah rate soaring up to around Rp 16,000
\nper U.S. dollar in January 1998 from Rp 2,500 in mid 1997,
\nSoeharto gave in and signed the agreement.<\/p>\n
Indonesia has since signed five LOIs. The IMF website says
\nthat as of June this year the government has secured US$1.9
\nbillion of $3.6 billion in approved loan.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-must-reduce-dependency-on-donors-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}