IMF team due here for fresh talks<\/p>\n
JAKARTA (JP): The government will not send a team to
\nWashington next week but will instead hold talks with
\nInternational Monetary Fund (IMF) officials due here soon to
\nreview the implementation of reforms, Indonesian and IMF sources
\nsaid yesterday.<\/p>\n
Director General of Taxes Fuad Bawazier, strongly rumored as
\nthe next finance minister, said the IMF team would arrive here
\nsoon after the announcement of the new cabinet slated for
\ntomorrow.<\/p>\n
"Since the beginning, there has never been any plan that Pak
\nWidjojo (Nitisastro) would lead a delegation to Washington,"
\nadded Fuad, who is also deputy secretary-general of the
\nPresident's Economic and Monetary Resilience Council, after a
\nmeeting at Bank Indonesia yesterday.<\/p>\n
Widjojo is the council's secretary-general.<\/p>\n
Fuad said yesterday the IMF normally conducted the review of
\nits bailout programs in the country receiving aid and not at its
\nheadquarters in Washington.<\/p>\n
Fuad himself disclosed Tuesday a plan to send a technical team
\nto Washington to negotiate with the IMF and the U.S. government.<\/p>\n
An IMF source in Jakarta confirmed yesterday the imminent
\narrival of an IMF team here which would be headed by one of the
\ninstitution's senior executives.<\/p>\n
Flexibility<\/p>\n
In Manila the World Bank's chief economist, Joseph Stiglitz,
\nwas quoted by Reuters as saying yesterday he expected the IMF to
\nshow flexibility over Indonesia's proposal to set up a currency
\nboard.<\/p>\n
"All international institutions and economists realize that
\nthey have to adjust their programs as more information comes
\nout," Stiglitz told a news conference in Manila.<\/p>\n
But Stiglitz reemphasized that President Soeharto must move
\nquickly to restore confidence in his troubled nation, warning
\nsocial conditions could worsen and further unsettle the region.<\/p>\n
He said the only way for Indonesia to end a standoff with the
\nIMF over conditions tied to a multi-billion-dollar aid package
\nwas to implement the structural reforms required by the fund.<\/p>\n
"I think obviously the logjam is most easily addressed by
\nmaking sure that the reforms that have been agreed (on are)
\nimplemented," he said on the sidelines of a forum on the Asian
\ncrisis organized by the World Bank and Asian Development Bank
\n(ADB).<\/p>\n
Indonesia has repeatedly said it is preparing to set up a
\ncurrency board, which would peg the rupiah to a hard currency.<\/p>\n
The IMF, which strongly opposes the plan, threatened last
\nmonth to delay releasing aid and announced last week that funds
\nscheduled to be delivered in March would be delayed at least
\nuntil April.<\/p>\n
Stiglitz said Indonesia was reeling under the impact of sharp
\ncurrency devaluation, falling oil prices and drought, which was
\nforcing the troubled nation of 200 million to import foodgrains.<\/p>\n
Oil prices have plunged worldwide in recent months. Indonesia,
\nthe only Asian member of the Organization of Petroleum Exporting
\nCountries (OPEC), is entitled to produce 1.456 million barrels
\nper day.<\/p>\n
The rupiah has lost more than 70 percent of its value against
\nthe dollar since last July.<\/p>\n
Indonesian economist Mari Pangestu earlier told the conference
\non East Asia in Manila that Indonesia was not in a position to
\nundertake the dramatic political and economic reforms that South
\nKorea and Thailand had implemented.<\/p>\n
Pangestu, a senior economist at the Centre for Strategic and
\nInternational Studies in Jakarta, said "the (short-term) answer
\nis we have to bring back a lot of capital," but she noted that
\nthe dispute with the IMF and the Indonesian leader's insistence
\nto peg the rupiah currency to the U.S. dollar were delaying the
\ninfusion of fresh funds.<\/p>\n
"We have to find intermediate solutions," she said. "We cannot
\nwait for the perfect solution before we start reforms."<\/p>\n
One such intermediate solution would be to return to a band on
\nthe rupiah's fluctuations or to have the rupiah pegged at 5,000
\nto the dollar if it is used to import food and medicine. (08\/rid)<\/p>",
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