Gus Dur told to stop creating controversy<\/p>\n
JAKARTA (JP): The recent signing of the new letter of intent
\nby the government and the International Monetary Fund (IMF)
\nshould provide enough momentum to revive confidence in the
\ncountry's economic reform program, experts say.<\/p>\n
However, noted economist Sjahrir said it was important for
\nPresident Abdurrahman Wahid to avoid creating new controversy to
\nmaintain the positive momentum.<\/p>\n
\"The important thing is that Gus Dur must stay away from
\nmaking unnecessary statements that only create controversy,\"
\nSjahrir said, referring to the President by his nickname.<\/p>\n
He pointed out that the President should not have called on
\nstate banks to help boost the weakening rupiah because the banks
\ndid not have sufficient resources and were still undergoing
\ncrucial recapitalization.<\/p>\n
\"Gus Dur must listen to his (economics) advisers ... it's now
\ncrucial to maintain the confidence of the market,\" he said.<\/p>\n
Abdurrahman urged state banks last week to buy dollars to help
\nsupport the weakening rupiah, and also called on the supposedly
\nindependent central bank to take stronger action to rescue the
\nlocal unit.<\/p>\n
The government finally signed on Wednesday a new letter of
\nintent with the IMF to pave the way for the release of a US$400
\nmillion loan early next month.<\/p>\n
The new letter of intent basically contains additional
\neconomic measures to support the IMF-sponsored economic reform
\nprogram agreed upon in January to help revive the crisis-hit
\neconomy.<\/p>\n
The loan was supposed to be disbursed in April but was delayed
\ndue to the slowness of the government in implementing key
\neconomic reform measures.<\/p>\n
The delay has created uncertainty over the government's
\ncommitment to economic reform and contributed to the depreciation
\nof the rupiah.<\/p>\n
Centre for Strategic and International Studies (CSIS)
\neconomist Pande Raja Silalahi said the signing of the new letter
\nof intent should help convince people of the government's
\ncommitment to economic reform.<\/p>\n
Pande pointed out that the rupiah had managed to gain most of
\nits lost ground since Wednesday, immediately after the signing of
\nthe new letter of intent.<\/p>\n
\"But what is important now is to deliver what has been
\npromised and to avoid creating new controversy,\" he said,
\npointing out that the recent fall of the rupiah was mostly caused
\nby noneconomic factors.<\/p>\n
He said the market would particularly keep a close eye on
\nprogress with the government's bank recapitalization program and
\nthe restructuring of the country's private sector debt overhang.<\/p>\n
The rupiah was badly hit over past weeks due to a combination
\nof external and internal factors, causing the local unit to
\nplunge to a seven-month low of Rp 8,700 to the U.S. dollar last
\nweek.<\/p>\n
Uncertainty over the country's economic reform program and
\ncontinuing political infighting also created the jitters among
\ninvestors and the currency market.<\/p>\n
The rupiah closed at 8,338 per dollar late on Friday.<\/p>\n
Sjahrir also said that the President should stop his political
\nmaneuvering because it could cause uncertainty among investors
\nand the market.<\/p>\n
He pointed out that the recent dismissal of Laksamana Sukardi
\nas the state minister of investment and state enterprises
\ndevelopment was the prerogative of the President, but by saying
\nthat Laksamana was replaced because he was involved in
\ncorruption, collusion and nepotism was inappropriate.<\/p>\n
Laksamana is a senior member of Vice President Megawati
\nSoekarnoputri's Indonesian Democratic Party of Struggle, which
\nhas the most seats in the House of Representatives.<\/p>\n
Sjahrir also said the President must stop thinking that other
\npeople were trying to overthrow his administration.<\/p>\n
\"Like it or not, this is a legitimate government ... there's
\nno reason for us to strive to topple the current government,\" he
\nsaid.<\/p>\n
The administration of Abdurrahman is the country's first
\ndemocratic government, elected last year after more than 32 years
\nunder the authoritarian leadership of Soeharto. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/gus-dur-told-to-stop-creating-controversy-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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