IMF to face regional pressure over conflict with Indonesia<\/p>\n
SYDNEY (Reuters): The International Monetary Fund will come
\nunder intense pressure from countries in the region to back down
\nfrom confrontation with Indonesia if social unrest worsens,
\npolitical analysts said yesterday.<\/p>\n
Indonesian President Soeharto has squared off against the IMF
\nover the terms of a US$43 billion bail-out package, raising the
\nprospect of delays in IMF funding. Economists warned that could
\nresult in soaring prices and a renewed banking crisis.<\/p>\n
Disquiet has grown across the region in recent days, with
\nCanberra urging the IMF to be sensitive in its dealings with
\nAustralia's nearest neighbor and main ally in Southeast Asia.<\/p>\n
Indonesia's neighbors worry that the terms of the IMF package,
\nincluding the removal of government subsidies on food and oil,
\nwill fuel more riots across the archipelago of 200 million people
\nand leave the country dangerously unstable.<\/p>\n
\"I think the IMF will have to climb down,\" Gerry van Klinken
\nof Sydney University's School of Asian Studies told Reuters.<\/p>\n
Dr Harold Crouch, senior fellow in Indonesian politics at the
\nAustralian National University, said Soeharto could press other
\nregional leaders for help on the IMF package.<\/p>\n
\"I can see him, with Australian support, pressing the IMF on
\nsubsidies for food and cooking oil and kerosene and the IMF could
\nwell give ground, I think they're quite flexible on that sort of
\nthing,\" Crouch said.<\/p>\n
Crouch said another slide in the rupiah's value might force
\nthe United States and China to act to protect other sensitive
\nregional currencies.<\/p>\n
\"I think the Americans have to consider that if the rupiah
\ncollapses again...the chances are it will drag other currencies
\nwith it,\" he said.<\/p>\n
\"If that happens, then the pressure on the Chinese would be
\ngreater, especially if Japan presumably doesn't replate its
\neconomy.\"<\/p>\n
Trevor Rowe, Asian chief for U.S.-based bank Salomon Smith
\nBarney's, said the lack of stability in Indonesia had cast a pall
\nover the rest of Asia and that Soeharto's re-election on Tuesday
\nprovided a good opportunity for new talks with the IMF.<\/p>\n
Analysts say regional side-effects of the crisis could include
\nan increase in illegal immigrants to neighboring countries like
\nMalaysia and inaction over forest fires that are threatening
\nSoutheast Asia with a pollution disaster for the second
\nconsecutive year.<\/p>\n
\"Refugees to Indonesia, people taking to piracy and that sort
\nof thing will be on the increase,\" said Dr Carl Thayer of the
\nAustralian Defense Force Academy's politics department.<\/p>\n
Soeharto stepped up the pressure on the IMF on Sunday when he
\nsaid the rescue package was aimed at producing a liberal economy
\nwhich was against Indonesia's constitution.<\/p>\n
The IMF has delayed about US$3 million of aid until April,
\nciting the political preoccupation with Soeharto's reappointment.<\/p>\n
\"I think that Soeharto is playing a brinkmanship game at the
\nmoment...even though looking at it from the outside it looks like
\na crazy kind of risk or gamble to take,\" van Klinken said.<\/p>\n
Crouch said there was a real chance that rioting could spread
\nto the big cities, forcing a military crackdown.<\/p>\n
\"At some point people are going to riot and the possibility is
\nthat it will spread to the big cities,\" Crouch said.<\/p>\n
\"If that happens, then the pressure on the military to do
\nsomething about Soeharto would be all the greater.\"<\/p>\n
Crouch said the crisis would also see regional influence shift
\naway from Indonesia to Malaysia and China and would weaken
\nJakarta's position in the Association of Southeast Asian Nations
\n(ASEAN).<\/p>\n
\"There would certainly be tensions within ASEAN,\" he said.<\/p>\n
Thayer said the make-up of the Soeharto's cabinet would be of
\nparamount interest to the region as it looks for economic
\nsolutions and a possible successor to the 76-year-old leader. In
\nthe meantime, ordinary Indonesians face even more difficulties.<\/p>\n
\"These are the easy days when people can still sell their
\njewelry. It's going to get worse,\" Thayer warned.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/imf-to-face-regional-pressure-over-conflict-with-indonesia-1447893297",
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