Indonesia wants IMF to show more flexibility<\/p>\n
JAKARTA (JP): Indonesian wants the International Monetary Fund
\nto show flexibility during negotiations on the country's reform
\nprogram, especially on issues which have potential to adversely
\naffect the poor, such as abolishing certain trading monopolies.<\/p>\n
Minister of Finance Fuad Bawazier said yesterday that
\nIndonesia would basically implement the 50-point agreement and
\nwould dismantle cartels and monopolies.<\/p>\n
However, not all points of the agreement will be implemented
\non time. In some cases, he said, society was not yet prepared for
\nthe adjustments.<\/p>\n
Bulog, the National Logistics Agency, should have surrendered
\nit's trading monopoly on agricultural commodities, excluding
\nrice, on Feb. 1. \"However, the private sector has not been able
\nto replace Bulog's role,\" Fuad told journalists.<\/p>\n
\"They do not have the necessary facilities, such as
\nwarehouses. So they are not yet ready. Once they are ready, we
\nwill liberalize trade,\" he added.<\/p>\n
Fuad leads the Indonesian delegation to the budgets and
\nsubsidies discussion group, one of five such entities formed by
\nthe IMF and the government to review the US$43 billion reform
\npackage.<\/p>\n
The other four groups focus respectively on monetary policy,
\nbanking reform, structural reform and external corporate debt.<\/p>\n
Fuad said that due to instability, the government and the IMF
\nhad agreed not to revise the 1998\/1999 budget, which comes into
\neffect next month.<\/p>\n
Next years budget has already been revised as a result of
\nstrong pressure applied by the IMF, who felt the first draft to
\nbe unrealistic.<\/p>\n
The new budget assumes a rupiah-U.S. dollar exchange rate of
\nRp 5,000, crude oil priced at US$17 per barrel and a 20 percent
\ninflation.<\/p>\n
The rupiah is currently trading around the Rp 10,000 level and
\noil prices have fallen to US$13 per barrel.<\/p>\n
Fuad also said that the government would continue to subsidize
\nthe imports of basic commodities, especially rice, and would
\naccommodate the subsidy into the budget.<\/p>\n
The monetary policy and banking reform groups also met
\nyesterday at the Ministry of Finance. The Indonesian delegations
\nwere led by Sjahril Sabirin, the central bank governor.<\/p>\n
\"I cannot comment on the meeting as it is still proceeding,\"
\nSjahril said.<\/p>\n
The structural reform group met at the Ministry of Industry
\nand Trade, with minister Mohamad (Bob) Hasan leading the
\nIndonesian delegation. IMF Asia Pacific director Hubert Neiss led
\nthe donor organization's team.<\/p>\n
\"We're in the middle of discussions, it's not appropriate to
\nget into any details or substance of the discussions,\" Neiss said
\nafter yesterday's meeting.<\/p>\n
\"Once we've finished, I'll be happy to talk to you again,\" he
\nadded.<\/p>\n
Hasan said that \"discussions will continue.\"<\/p>\n
Following the meeting, Hasan met with World Bank country
\ndirector Dennis de Tray for discussions on the Indonesian
\neconomy.<\/p>\n
\"We talked about projects here and reforms .... issues
\nassociated with reestablishing confidence in the Indonesian
\neconomy,\" de Tray told reporters after the meeting.<\/p>\n
De Tray said they also discussed the need to move banking
\nsector reforms forward very quickly and on how to resolve the
\ncorporate debt problem.<\/p>\n
A meeting was also held between the IMF and the government's
\ndebt settlement team at the National Development Planning Board's
\noffice. The Indonesian delegation was jointly led by State
\nMinister for the Empowerment of State Enterprises Tanri Abeng and
\nRadius Prawiro, chairman of the debt settlement team. The meeting
\nended on an optimistic note.<\/p>\n
Radius said the meeting yesterday was \"full of sincerity to
\nformulate the best way to quickly solve the external corporate
\ndebt problem.\"<\/p>\n
\"It is important to quickly solve the debt problem because
\nrebuilding foreign investor confidence in this country depends on
\nhow we solve this problem,\" Radius told journalists following the
\nmeeting.<\/p>\n
He stressed that as a member of the IMF, Indonesia had the
\nright to ask for aid and assistance.<\/p>\n
\"If there are problems we should be able to solve them by
\ndiscussion,\" he said, referring to an impasse between the
\ngovernment and the IMF over delays in disbursing the second
\ntranche of aid from the IMF rescue package worth US$43 billion.
\n(08\/das\/rid)<\/p>",
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