IMF awaits publication of PwC reports<\/p>\n
SYDNEY (Dow Jones): Hubert Neiss, the International Monetary
\nFund's Asian director, said Wednesday the IMF will work with the
\nnew Indonesian government.<\/p>\n
But he said the Fund is still awaiting the publication of an
\naudit into the Bank Bali corruption scandal before resuming
\nlending to the country.<\/p>\n
\"It is very important because disclosure and publication is a
\nvery efficient way to deal with corruption,\" Neiss told Dow Jones
\nNewswires.<\/p>\n
While Neiss said he had seen \"a small version\" of the (Bank
\nBali) audit, he wouldn't comment on its contents.<\/p>\n
Neiss said the IMF is willing to work with the new Indonesian
\ngovernment to discuss IMF reforms, but said the timing of the
\nIMF's next visit to Indonesia would depend on the new government.<\/p>\n
\"It is up to the (Indonesian) government to decide when is the
\nbest time\" to start discussions with the IMF, Neiss said.<\/p>\n
However, Neiss said he expects the pace of IMF reforms, which
\nwere implemented by the previous Habibie government, to be
\nmaintained by the new government.<\/p>\n
New Indonesian President Abdurrahman Wahid Tuesday unveiled a
\nmultiparty cabinet, pledging its first task will be to get
\neconomic recovery back on track.<\/p>\n
Wahid was last week elected President of Indonesia by the
\nPeople's Consultative Assembly.<\/p>\n
\"We have reason to believe (the new government) will continue
\nwith the present strategies as contained in the IMF program,\"
\nNeiss said.<\/p>\n
\"As soon as things have fallen in place in Indonesia, the new
\ngovernment is starting to work, I would assume the IMF, the World
\nBank, the Asian Development Bank would be back and resume the
\nprocess of policy implementation in order to push ahead the
\nrecovery after this short interruption,\" Neiss said.<\/p>\n
\"Substantial international financial assistance will be needed
\nfor some time,\" Neiss added.<\/p>\n
\"The IMF, together with the rest of the international
\ncommunity, will be ready to support these efforts,\" Neiss said.<\/p>\n
Relations between Indonesia and the IMF were badly damaged
\nunder the Habibie government due to the high-profile PT Bank Bali
\ncorruption scandal. The IMF, World Bank and other lenders
\nsuspended loans to Indonesia pending a publication of an
\nindependent audit into the affair.<\/p>\n
The scandal centered on the transfer of around US$80.0 million
\nout of the nationalized bank to a company controlled by a senior
\nofficial in the former ruling Golkar party.<\/p>\n
Apart from publishing that audit, the Indonesian government
\nwould need to continue with banking reforms and corporate
\nrestructuring, Neiss said.<\/p>\n
The government would also need to create an incorruptible and
\nefficient legal system, a social safety net and eventually
\nconsolidate public finances, Neiss said.<\/p>\n
Neiss also defended the IMF's strategy in trying to restore
\ngrowth to crisis-hit Asian countries.<\/p>\n
The IMF method involves using tight fiscal policy and raising
\ninterest rates to stabilize the economies, then encouraging
\neconomic recovery through expansionary fiscal policy and
\nrestructuring the banking and corporate sectors.<\/p>",
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"sponsor": "Okusi Associates",
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