'IMF may impose few conditions'<\/p>\n
JAKARTA (JP): The International Monetary Fund (IMF) should not
\nimpose many conditions on Indonesia in return for financial help
\nto bail it out of the monetary crisis as it had done well in
\nmanaging its economy, Minister\/State Secretary Moerdiono said
\nyesterday.<\/p>\n
But economists and analysts warned that financial assistance
\nfrom the IMF usually came with tough conditions attached to it
\nand Indonesia could have trouble coping with them.<\/p>\n
\"So far we've done our homework well. If we do our homework
\nwell, there should be no conditions attached,\" Moerdiono said
\nafter accompanying President Soeharto in a meeting with Malaysian
\nKing Ja'afar Abdul Rahman.<\/p>\n
\"Just like a company that wants to borrow money from a bank,
\nif the company has done well, the bank will not request too many
\nconditions,\" he added.<\/p>\n
Soeharto decided on Wednesday to sound out long-term support
\nfunds from international financial institutions, including the
\nIMF, to tackle the monetary crisis.<\/p>\n
And Moerdiono echoed yesterday Minister of Finance Mar'ie
\nMuhammad, who announced the decision, saying that IMF assistance
\nwas only a precautionary measure to help overcome the crisis.<\/p>\n
IMF managing director Michel Camdessus said Wednesday in
\nWashington that his organization would support Indonesia's
\ndecision to put in place a new economic program in response to a
\ndecline in the Indonesian rupiah.<\/p>\n
\"The IMF strongly supports the approach that has been followed
\nby Indonesia, which sees this as an occasion to strengthen its
\neconomic policies even if fundamentals are basically sound,\"
\nCamdessus said in a statement.<\/p>\n
Camdessus said two teams would arrive in Jakarta this week to
\nbegin discussions on an IMF-supported economic program and to
\nprovide technical assistance for financial sector reform.<\/p>\n
The World Bank also welcomed the government's initiative to
\nseek international support funds to stabilize its currency and
\neconomy.<\/p>\n
\"Indonesia has made a wise and intelligent move to seek funds
\nfrom the IMF,\" the World Bank's country director for Indonesia
\nDennis de Tray said yesterday.<\/p>\n
\"The rupiah's free fall over the past few weeks was triggered
\nby factors that we do not fully understand, which is why
\nIndonesia turned to the IMF,\" he added.<\/p>\n
The rupiah, along with other regional currencies, has been
\nunder speculative attack since the de facto devaluation of the
\nThai baht on July 2. Since then, the rupiah has lost about 35
\npercent of its value.<\/p>\n
De Tray said there was a pressing need to rebuild Indonesia's
\nforeign exchange market which was very thin because there were no
\ndollars coming in.<\/p>\n
Bank Indonesia governor J. Soedradjad Djiwandono revealed
\nWednesday that the size of Indonesia's foreign exchange market
\nwas halved from US$10 billion a day before the crisis to about $5
\nbillion to $6 billion now.<\/p>\n
De Tray said the currency crisis in Indonesia had turned into
\na confidence crisis, and thus it needed another approach to
\nhandle it.<\/p>\n
\"What we need to do is put together a package that is so good
\nthat we can say to the world, financing will not be a problem,\"
\nhe said.<\/p>\n
De Tray said the essence of the IMF program was to help the
\nIndonesia government strengthen or even accelerate economic
\ndevelopment in the country.<\/p>\n
Former cabinet minister Moh. Sadli hailed the government move,
\nbut warned that the government must be prepared to take a bitter
\npill from conditions tied to the IMF aid package.<\/p>\n
\"Well, we have to sacrifice, accepting all possible conditions
\nto restore confidence, shore up the rupiah and attract foreign
\nfunds which have left Indonesia to reenter the country,\" Sadli
\nsaid.<\/p>\n
He said Indonesia was actually not in dire need of IMF help
\nyet because its fundamentals were much stronger than the
\nPhilippines and Thailand which had already sought IMF help.<\/p>\n
The country had enough foreign exchange reserves to fund five
\nmonths of imports and had substantial standby loans which could
\nbe withdrawn any time, Sadli said.<\/p>\n
\"Anyway, it was a good move as it was taken before the crisis
\nbecame too critical,\" he said.<\/p>\n
He also praised Soeharto's decision to reappoint veteran
\nbureaucrat Widjojo Nitisastro to coordinate efforts to help
\nrestore confidence in the country's economy and currency.<\/p>\n
Widjojo is among those credited for Indonesia's climb out of
\nan economic abyss of near bankruptcy and chaos in the mid-1960s
\nto become one of the world's fastest growing economies.<\/p>\n
He retired from the cabinet in 1983 but has since been active
\nbehind the scenes in formulating economic policy. (prb\/aly\/rid)<\/p>\n
Banks -- Page 4<\/p>\n
Camdesus -- Page 10<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/imf-may-impose-few-conditions-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }