IMF exit policy must be acceptable to market: Experts<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government must prepare a credible economic reform program if
\nit wants the country to graduate from the current International
\nMonetary Fund program successfully, according to experts.<\/p>\n
The experts said credibility was crucial to maintaining the
\nsupport of the people and the international community for the
\ncountry's fragile economy.<\/p>\n
\"The main concern is market acceptability,\" Thailand's former
\nfinance minister Tarin Niimmahaerni, who helped his country
\nsuccessfully graduate from the IMF in 2000, said during a seminar
\nhere.<\/p>\n
Thailand was the first country in the region to be hit by the
\ndevastating 1997 financial crisis, which forced its government to
\nadopt a tough IMF economic bailout program. The country has now
\nbegun to enjoy stronger economic growth, as reflected in its
\nhigher than expected first quarter growth of 6.7 percent from the
\nsame period last year.<\/p>\n
The seminar, jointly held by Bank Indonesia, the Indonesian
\nEconomists Association (ISEI) and the University of Indonesia's
\nInstitute for Economic and Social Research, was partly aimed at
\ngathering advice and input as the government explores various
\nexit strategies for when the IMF program ends in November.<\/p>\n
Besides Niimmahaerni, other prominent speakers at the seminar
\nincluded the special adviser to the IMF's managing director, Jack
\nBoorman, the former deputy governor of Australia's Federal
\nReserve Bank, Stephen Grenville, World Bank country director for
\nIndonesia Andrew Steer, former coordinating minister for the
\neconomy Rizal Ramli and Bank Indonesia senior deputy governor
\nAnwar Nasution.<\/p>\n
These speakers will also attend an ISEI seminar next week in
\nMalang, East Java, to discuss the same topic.<\/p>\n
Grenville said that to help ensure a smooth transition after
\nthe IMF program ends, the government must set up a favorable
\nenvironment. This will include establishing a \"home-grown\"
\neconomic program that reflects a strong commitment to continuing
\nthe current reform drive.<\/p>\n
He said the market must view this home-grown program as an
\n\"anchor policy\".<\/p>\n
The government is expected to unveil its exit strategy from
\nthe IMF program next month, when it presents the 2004 state
\nbudget draft. Over the past several months there has been intense
\ndebate over what strategy the government should take.<\/p>\n
One camp, whose leaders include Rizal Ramli, is demanding the
\ngovernment end the monitoring role of the IMF.<\/p>\n
There are also calls for the government to allow the IMF to
\ncontinue monitoring the government's economic reform program,
\ngiving the country access to IMF money if needed. This is similar
\nto the exit strategy adopted by Thailand.<\/p>\n
The IMF's continued monitoring role would be expected to
\ninstill confidence in the government's reform program,
\nparticularly ahead of the 2004 elections, when the government
\ncould be tempted to implement popular economic measures instead
\nof tough reforms as the political pressure intensified.<\/p>\n
Boorman said that in this type of situation, it was crucial
\nfor the country to maintain a healthy foreign exchange reserves
\nlevel, which would be possible if the government opted for the
\nThailand exit strategy model.<\/p>\n
If it does not extend the current IMF program, the government
\nalso will face a serious financing gap as the country will no
\nlonger be eligible for the debt rescheduling facility from the
\nParis Club of creditor nations.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/imf-exit-policy-must-be-acceptable-to-market-experts-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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