JP\/3\/IMF (3disc)<\/p>\n
On the sidelines of the Special Leaders' Meeting on the
\nAftermath of the Earthquake and Tsunami in Jakarta on Thursday,
\nthe International Monetary Fund's Managing Director Rodrigo de
\nSato talked with The Jakarta Post's Riyadi Suparno
\nand Urip Hudiono on the impact of the disaster on the
\ncountry's economy.<\/p>\n
Question: What is the IMF's assessment of the impact of the
\ntsunami disaster on the Indonesian economy?<\/p>\n
Answer: From an economic point of view, we have not
\nappreciated the impact of the disaster -- up until this moment.
\nBut all of this is temporary, it is still very early. Right now,
\nwe do not see signs of great destruction in growth prospects for
\nthe economy.<\/p>\n
We see the economy as being on a very important growth path;
\nwe see the government with a very important reform agenda. The
\nIndonesian economy has increased its reliability and has reduced
\nits liabilities in recent years -- and all of that is going to
\npay off now.<\/p>\n
Of course, that can be misleading, because what I think is
\nrelevant is the impact on the regions and the economic sectors
\nthat are affected.<\/p>\n
An analysis of the impact of the tsunami on the overall
\neconomy of Indonesia would probably say that it was not very
\ndisruptive (economically). But that could be misleading. The
\nquestion is in place, even if it is not in the overall balance
\nvery big, it could be extremely big for the area, which I think
\nit is.<\/p>\n
Maybe it is not so much in terms of GDP (gross domestic
\nproduct) because the area has oil and gas resources that have not
\nbeen affected -- but it could be very destructive in terms of
\nfisheries and agriculture.<\/p>\n
So I do not think this is a problem in which aggregate numbers
\nof the GDP are relevant, but it is more a question of
\nmicroeconomics and microsocial problems. And that, of course, is
\nvery important.<\/p>\n
And how would this affect Indonesia's budgetary position?<\/p>\n
Of course there will be very important needs for the budget to
\nallocate funds for: reconstructing infrastructure and taking care
\nof such social needs as health and water-supply facilities.<\/p>\n
In that respect, we believe that the actual pledges of
\ndifferent bilateral donors to Indonesia are going to be very
\nimportant in terms of volume and could certainly balance
\nfinancial needs.<\/p>\n
That is why we advise the Indonesian government to contemplate
\nall options and we have offered our own options of financing if
\nthey are needed.<\/p>\n
But it would be too early to assess that. What is important
\nnow is to assess the damage, and to get as many commitments as
\npossible from the international community -- and guarantee the
\ntransparent and efficient use of those resources.<\/p>\n
What is also important is that we are here to help and advise
\nin technical assistance and that the government knows this.<\/p>\n
So the IMF will only provide technical assistance, such as
\nhelp in managing the balance of payments?<\/p>\n
We do not provide grants, but we can work with donors to get
\nconcessional lending, which are less expensive than in the
\nmarket. But I want to emphasize that this is up to the
\ngovernment. If the government sees a need, we will contemplate,
\nwith speed, fulfilling it.<\/p>\n
Many creditor countries are now proposing a debt moratorium,
\nbut the best way would be pursuing it through the Paris Club,
\nwhich would involve the IMF. How does the IMF see this?<\/p>\n
The Paris Club is a club of creditors and the IMF is not part
\nof it. We assist the Paris Club technically, when it asks us to
\ndo so.<\/p>\n
So, it would be up to the Paris Club creditors to ask us what
\nthey want us to do -- if they want us to evaluate needs or plan
\nschemes.<\/p>\n
It's not prefixed that we have to be involved. If the Paris
\nClub decides to ask us, we will oblige. But if they do not ask
\nus, then we will not be involved. It is a question for them to
\ndecide, not us.<\/p>\n
So there is no requisite of the Fund to be involved in any
\nParis Club decision.<\/p>\n
It is the usual thing in the circumstances, these are probably
\nvery different circumstances from others.<\/p>\n
When Indonesia negotiated with the Paris Club some debt
\nrestructuring, that was another circumstance and not the same as
\nwe are envisioning now.<\/p>\n
I would not have anticipated that we would be involved, but if
\nwe are, we will of course help to do as much as we can.<\/p>\n
Some NGOs are saying that a debt moratorium is not enough, and
\nare demanding debt relief. What is the IMF's comment on that?<\/p>\n
First of all, we are not the creditors, so we have nothing to
\nrespond to. It would be up to the creditors to decide.<\/p>\n
The disaster is such an important problem -- although we are
\nstill saying that it is not a problem that will disrupt the whole
\neconomy -- but such an important problem for the area, such a
\ncostly problem humanly and socially.<\/p>\n
We believe it needs a substantial amount of grants, and
\nprobably also concessional financing or a moratorium. There has
\nto be a mixture of things, depending very much on the actual
\nneeds, which are still being evaluated.<\/p>\n
So it's too early to make a clear recipe as to what is going
\nto be needed. What is important is that we have different tools
\nthat we can use, and that they are all available: new financing,
\nrefinancing, grants. And we insist that grants should be a very
\nimportant part of it all.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jp3imf-3disc-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}