Macroeconomic targets need revising: Neiss<\/p>\n
JAKARTA (JP): Macroeconomic assumptions of the International
\nMonetary Fund's economic reform program for Indonesia will have
\nto be adjusted due to the country's worsening situation, IMF Asia
\nPacific director Hubert Neiss admitted yesterday.<\/p>\n
\"Yes, we have to make adaptations in the macroeconomic
\nframework to the new situation that unfortunately is even weaker
\nthan before,\" he told media following a 45-minute meeting with
\nPresident B.J. Habibie.<\/p>\n
Neiss arrived in Jakarta Tuesday for a marathon round of talks
\nwith several ministers, opposition leaders and foreign
\nambassadors until Saturday.<\/p>\n
He is reviewing the country's situation following the recent
\nbloody unrest, and his report will be the basis for the IMF's
\nboard of directors to decide on the disbursement of another US$1
\nbillion in bailout funds.<\/p>\n
Neiss said falling production, skyrocketing inflation and
\nuncertainty over the rupiah exchange rate had caused a further
\ndecline since his last visit.<\/p>\n
He declined comment on whether the rupiah year-end exchange
\nrate target of Rp 6,000 to the dollar was still realistic.<\/p>\n
\"We don't know at this point what is the good forecast for the
\nexchange rate,\" he said.<\/p>\n
The rupiah is currently hovering at about Rp 10,500 against
\nthe U.S. dollar, from Rp 2,450 in July last year when the crisis
\nbegan to unfold.<\/p>\n
Neiss stressed there was no need to revise the structural
\nreform program.<\/p>\n
\"The very detailed and far reaching structural reforms will
\nstay as it was originally agreed.\"<\/p>\n
He added that financial reform was the centerpiece of the IMF
\nreform program and had become an urgent necessity.<\/p>\n
\"There will be no need for revision, but there is a need for
\nstrengthening and possibly acceleration in the rehabilitation of
\nthe financial sector.\"<\/p>\n
He explained that it would take time for the Indonesian
\neconomy to recover, with much depending on a return in investor
\nconfidence and political stability.<\/p>\n
\"Eventually, what is needed is a return of capital, not only
\nforeign capital but that which belongs to Indonesians.\"<\/p>\n
Neiss said another important topic to discuss with the new
\ngovernment was monetary policy.<\/p>\n
\"That is very important because we have had serious increasing
\ninflation which is very important to stop. We have to restrain
\nmonetary expansion.\"<\/p>\n
He said he would discuss the best possible ways to solve the
\nproblem with Bank Indonesia.<\/p>\n
\"The two important areas to cover are the budget and the
\nmonetary policy.\"<\/p>\n
He added that the discussion would also cover the country's
\noverseas private sector debt.<\/p>\n
\"We can expect some first concrete results will emerge,\" he
\nsaid. He added that the proposed Mexican model for resolving the
\ndebt conundrum offered several attractions to creditors and
\nsimultaneously limited the financial load of the
\ngovernment. (rei\/prb)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/macroeconomic-targets-need-revising-neiss-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}