'Just a little wheel in the IMF machinery'<\/p>\n
By Yenni Djahidin<\/p>\n
WASHINGTON, DC (JP): For a man who has brought billions of dollars
\ninto the Indonesian economy, his appearance is hardly glamorous
\nand his office looks simple and neat.<\/p>\n
Dr. Hubert Neiss, the Asia and Pacific Director of the
\nInternational Monetary Fund (IMF), gives the impression of a
\nquiet and serious person, but one that always has a smile on his
\nface.<\/p>\n
The Austrian economist, who will retire soon from the IMF,
\nsaid his involvement with Indonesia goes beyond his work. He said
\nhe is concerned about Indonesians, which he demonstrated by
\npersonally inspecting staple prices in the markets of Jakarta's
\nslums.<\/p>\n
Neiss, 64, a frequent visitor to Indonesia especially in times
\nof crisis like now, says he knows he is in Indonesia when he gets
\noff the plane and the heat and humidity slap him in the face.<\/p>\n
\"I don't say I don't like it, but I just have to get used to
\nit,\" he said in an interview at his office here last week.<\/p>\n
The soft-spoken economist, who likes playing the violin, wants
\npeople to see him as an IMF official who is trying to work with
\nthe Indonesian government on programs for economy recovery. He
\nsaid it was a big mistake to see him as an \"Indonesian minister\".<\/p>\n
Neiss visits Indonesia again this weekend with IMF deputy
\nmanaging director Stanley Fischer. Their main agenda this time is
\nto talk to leaders of the political parties who are likely to
\nform the new coalition government after this month's general
\nelection in Indonesia.<\/p>\n
In the interview, Neiss talked about his impression of
\nIndonesia, the people and the officials he has dealt with. The
\nfollowing are excerpts of the interview:<\/p>\n
Question: What do you like about Indonesia?<\/p>\n
Answer: This is a place where I have to work. I don't go on vacation
\nbecause I like the temples and the beaches and the dances. I go
\nthere because I am engaged with very intensive discussions.<\/p>\n
Q: You were in Indonesia as an IMF representative in 1973. What
\nwas your impression of Indonesia then?<\/p>\n
A: Yes, I lived there for two years with my family. I got quite
\nfamiliar and quite attached to the Indonesian way of life.<\/p>\n
I like the people. They are usually quiet and serious, but
\nthey also like humor and are very pleasant. I learned the
\nlanguage at that time, but I forgot most of it.<\/p>\n
Q: What places do you like in particular?<\/p>\n
A: I like to go to the countryside. Irian Jaya or Bali, at the
\ntime when rice is being planted or harvested. This is something I
\ndon't know from my own country. Of course, I like the Indonesian
\nculture and tradition, the music. Gamelan, the flute, the violin.
\nJavanese music is quieter and thicker. The Balinese are livelier
\nand more aggressive. I like both, but I prefer the Javanese
\nmusic. And, I like the dances. The Balinese dances are more
\ncolorful, more luxurious. I prefer the Balinese dance, the
\nRamayana dance, other dances, Barong and Kecak. And I also like
\nthe temples, the Hindu and Buddhist temples. When I was there,
\nBorobudur was just being restored.<\/p>\n
Q: Given your frequent visits to Indonesia over the past year,
\nmany people joke that you are the actual president of Indonesia,
\nbecause you set the economic policies...<\/p>\n
A: This is a big mistake, of course. I am just an official of the
\nIMF. I am happy enough to work with the Indonesian government.
\nBut I can't dictate what happens in Indonesia. I can help to
\nnegotiate the program every month which the Indonesian government
\nis free to agree or not to agree to. I have to persuade them, I
\nhave to give them good reasons. We have to win their trust so
\nthey know that there is a reason. And then we have to convince
\nthe IMF executive board that this is a good program and it needs
\nfinancial support. So, I'm just one of many wheels in the
\nmachinery of how an IMF program works. It takes a lot of people
\nto make this work. It takes many government advisors from many
\ncountries, the IMF staff, the World Bank staff, the ADB staff.
\nPapers have to be produced. It takes the whole executive board to
\nstudy the program every month, discuss it and decide.<\/p>\n
I'm just a little wheel in this whole machinery.<\/p>\n
But my interest and involvement in Indonesia goes beyond the
\npurely financial and economic matters.<\/p>\n
Q: Can you elaborate that?<\/p>\n
A: For instance, I was very interested in the rice situation in
\nIndonesia. That's something that IMF usually doesn't review. So,
\nwe had many discussions. If you remember in July and August,
\nthere were speculations, rumors of an impending famine. Rice
\nstocks were low, rice was being smuggled away to Singapore. The
\ndistribution system was not working well because the Chinese
\n(shopkeepers) had left. So, this was a very serious situation.<\/p>\n
Something that normally doesn't occur within the normal work
\nof an IMF official, but I was very concerned about it. I went to
\nthe market (Tanah Abang) every morning and checked the rice
\nprices with the merchants. I checked them every morning during
\nthe crisis. First, I didn't believe the price because in the
\nstatistics we had the price per kilogram, but they had price per
\nliter. So, we sorted it out afterward.<\/p>\n
So there are many things that make this work more personal,
\nmore unusual, more intriguing.<\/p>\n
Q: Can you describe your relationships with Indonesian officials
\nlike Soeharto, B.J. Habibie and Ginandjar Kartasasmita?<\/p>\n
A: First, it's a working relationship. But it will never work if
\nthere wasn't a measure of personal trust, respect of each other's
\nopinions. That I think is necessary.<\/p>\n
Q: What do you think about Soeharto?<\/p>\n
A: I only met him twice. He was very reticent. He was not very
\ncommunicative, very reserved. The communication was not as close
\nto be really effective. He had a translator, which makes it more
\ndifficult to get them personally in a relationship. Probably to
\nhave a closer relationship with Soeharto you would have to know
\nhim for years, meet him for years, work with him, deal with him.
\nWith Habibie, it was immediately an open relationship.<\/p>\n
Q: So it's easier with Habibie?<\/p>\n
A: Oh yes.<\/p>\n
Q: What do you think of Habibie?<\/p>\n
A: I think he will suddenly go into history with some significant
\nachievements during a difficult period. I don't speak it for
\npolitically liberalization. Political prisoners were freed, press
\nfreedom was begun, political parties could be formed, and labor
\nrights were signed. And most people forget he created a framework
\nfor a transition taking place. The timetable, the date. So, on
\nthe political side, I think this is very significant.<\/p>\n
On the economic side, and this is where I really can talk with
\nsome knowledge, he has taken over the (IMF) program and was
\ndetermined to implement it. In critical periods, he personally
\nmade sure that important decisions were made. And the record
\nspeaks for itself. Every monthly review was sanctioned by the
\nexecutive board of the IMF, and as a result every month for the
\nimmediate period, a billion dollars were disbursed. This is a lot
\nof money. The IMF board is very critical. They would not pay the
\nmoney if the government policies were only half-hearted.<\/p>\n
When there is a new government and whatever the new government
\nwill be, this government will not inherit an economy in ruins.
\nThey will inherit an economy that has stabilized, that has been
\npartly rebuilt in capacity, and that is probably on the way to
\nrecovery. Don't forget the night when Habibie took over, the
\nexchange rate went to Rp 16,000 to the dollar. Yesterday, it was
\nRp 7,800. Reserves were down then, now they are up again.
\nInterest rates were 70-80 percent. Today they are around 23.5
\npercent.<\/p>\n
So, things have improved and Habibie could muster all the
\ninternational support that Indonesia needed.<\/p>\n
Q: You seem to get along well with him? What about other
\ngovernment officials<\/p>\n
A: One reason is he is very open to everybody. He doesn't have
\nany formalities. He is very open and very spontaneous. The second
\nreason is he speaks German and so do I. And occasionally we had a
\nlittle chat in German. I have good experience working with
\nIndonesian officials. I like to work with Ginandjar, he is very
\nefficient. And of course I like to work with my old friends,
\nProf. Widjojo Nitisastro and Ali Wardana, who are still very
\nimportant people in the formation of economic policies.<\/p>\n
Q: What about opposition leaders?<\/p>\n
A: That was very important. Otherwise, the economic program would
\nbe a playing ball in the political arena to the detriment of
\npolicy-making. Every opposition party would attack this or that
\npart of the letter of intent. So, to preempt that, I made great
\nefforts to explain to various opposition leaders. Also to the
\nprofessors in the universities, the students, the union leaders.
\nAnd to exchange views with them.<\/p>\n
Basically, they agree with the strategy and therefore if they
\nwill form the government, they will not throw everything
\noverboard and start something different. It will be continued.
\nThat is very important for a smooth recovery.<\/p>\n
And also the markets know, so confidence is back. Everybody
\nknows that if there is a different government, they will not
\noverturn everything. Maybe they will do things differently here
\nor there, but they will basically continue. They will continue to
\nrestructure the banks, they will continue with corporate
\nrestructuring, they will have careful monetary policies so
\ninflation doesn't emerge. And for a while there will be an
\nexpansionary budget policy, partly to cover expenses of the
\nsocial safety net. And this is the present strategy and I don't
\nthink it can be fundamentally different.<\/p>\n
Q: You are confident that whoever takes power will continue the
\nprogram?<\/p>\n
A: They will continue the basic strategy and they will continue
\nto have a relationship with the IMF. It has not been a
\npolitically controversial issue.<\/p>\n
Q: Can you tell me what your philosophy is in life?<\/p>\n
A: I have never thought about it.<\/p>\n
Q: What is your personal ambition?<\/p>\n
A: I don't think I have any ambition, that's for sure. If I had,
\nit would be too late. You know, you have to start very, very
\nearly.<\/p>\n
Q: Are you going to retire soon?<\/p>\n
A: Yes, I will retire in January. In the IMF, everybody has to
\nretire when he is 65. It's mandatory, except for the managing
\ndirector, who can stay longer.<\/p>\n
Q: What's your plan after the IMF?<\/p>\n
A: Frankly, I tell you I don't know yet. I don't know yet but if
\npossible, I would like to continue for a couple of years to work
\non the Asian countries. But in what form, in what way, I don't
\nknow. I don't even know whether there is such a thing. I haven't
\nhad much time to explore. I have work to do.<\/p>\n
Q: Do you know who will take over your position?<\/p>\n
A: Yes, of course. It will be one of the deputies. But there
\nhasn't been any official decision.<\/p>\n
Q: How did you end up with the IMF?<\/p>\n
A: Thirty-three years. It will be 33 years next January.<\/p>\n
Partly by coincidence. I studied here for a while in the
\nStates. I got a master's degree at the University of Kansas. I
\nhad a scholarship. So I always had the idea that maybe at some
\nstage I may come back to it. And when I finished my studies in
\nVienna, I entered the Austrian Institute of Economic Research,
\nand was there for five years. I was quite happy. One weekend, my
\nboss gave me a newspaper and said, \"there's an economic article,
\ncan you read it over the weekend, and give an assessment,\" which
\nI did. But after reading the article, I turned the page and there
\nwas a little advertisement, and it was in English so it caught my
\neye. It said the IMF was looking for economists, and people who
\nare interested should write to the Austrian National Bank. So I
\ndidn't want to write to the Austrian National Bank ... I wrote to
\nthe IMF directly in English and said, \"I have read your
\nadvertisement, and I'm interested. Please ask me what you require
\nand tell me what you offer.\" And, they wrote me back and didn't
\nanswer any of those questions. But said \"somebody from Washington
\nwould be in Vienna at that time and would interview you.\" So I
\nwent to this interview. I never seriously thought this would get
\nanywhere. All was forgotten. But weeks later, I got a cable
\noffering me a job with the IMF in the European Department,
\nstarting January 1. It was November. At that time, we
\ncommunicated by cable. So I said, \"great.\" And they offered two
\nyears. I wrote them back. \"I'm happy to come, but January 1 would
\ndisturb the Christmas vacation. Could I start February 1?\" They
\nwrote yes, and that's what I did.<\/p>\n
Q: What year was that?<\/p>\n
A: It was 1967, and I started working in the European Division.
\nAfter two years, I was offered to stay for a period of time. I
\nsaid, well, two years is a bit short, and we haven't got used to
\nit. It said that I ought to stay for another two years. And then
\nafter four years, I was offered to come to the Asian Department.<\/p>\n
I started as an economist, at the lowest rank. At the Austrian
\nInstitute, I was already higher. But I made some progress, and
\nthen I went to the Asian Department. They offered me to become a
\ndivision chief. In that division, the only important country at
\nthe time was Indonesia. Then there were a few islands, Tonga and
\nWestern Samoa. So I started to go on missions to Indonesia. But I
\nwasn't leading the mission. I got the offer to come to Indonesia
\nfor two years, 1974 to 1975.<\/p>",
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