Minister confident reform program will be followed<\/p>\n
JAKARTA (Agencies): Indonesia's senior economic minister said
\nyesterday the rupiah could strengthen to 6,000 to the dollar by
\nthe end of the year if the reform program goes well and if the
\ncountry's huge private foreign debt problem can be resolved.<\/p>\n
Ginandjar Kartasasmita, the coordinating minister for the
\neconomy, finance and industry told journalists he's optimistic
\nIndonesia will get a \"vote of confidence\" from the International
\nMonetary Fund (IMF) when it decides next week whether to resume
\nfunding for Jakarta.<\/p>\n
The minister also expressed confidence that the reform
\nprogram will be followed \"strictly\", which will help market
\nsentiment about the country.<\/p>\n
Ginandjar acknowledged that Indonesia has had \"problems with
\ncredibility in the market\" because it was widely perceived to
\nviolate terms of the first two agreements it reached with the
\nIMF.<\/p>\n
But he said credibility of the latest agreement, reached early
\nthis month, will be established as markets see how serious the
\ngovernment is in implementing it.<\/p>\n
The minister said complaints about how a January decree
\nfreeing up the clove trade were being evaded have been \"fully\"
\ndealt with by government ministers at a meeting Wednesday where
\nExcise Department officials were \"bluntly\" ordered to ensure
\ncompliance.<\/p>\n
Recently, some producers of Indonesia's distinctive spice
\ncigarettes have complained they were still forced by buy from a
\nmonopoly headed by President Soeharto's youngest son.<\/p>\n
With Wednesday's meeting, Ginandjar said, \"companies will not
\nbe forced, will not be required, not persuaded\" to buy cloves
\nfrom any particular seller. He said the clove monopoly will be
\nabolished one month ahead of the scheduled July 1 date Indonesia
\npromised the IMF.<\/p>\n
\"Watch us,\" he asserted, saying complaints from the public and
\nmedia about where Indonesia wasn't making promised reforms were
\nwelcome. Insisting the new reform program will be implemented
\nstrictly, he said. \"I can assure you that there isn't any member
\nof the (Soeharto) family involved in any monopoly.\"<\/p>\n
Asked about how strongly Soeharto is personally committed to
\nsubstantial economic reform, Ginandjar said the president is
\n\"strongly behind it. You may or may not believe me, (but) it's
\ntrue.\"<\/p>\n
The minister said the President had concerns about the
\nprevious two IMF programs but \"these have been satisfied\" in the
\nnewly-negotiated agreement. \"There's no reason why the President
\nshould not continue to support\" the new agreement, he added.<\/p>\n
Private debt<\/p>\n
However, he agreed that resolving the private debt problem
\ncould take time since it is complicated. But he says solutions
\nmust be worked out, because \"it will cost the government a lot if
\nwe fail.\" Without a resolution to debt problems, Ginandjar said,
\n\"I don't think we can fully restore confidence in the rupiah.\"<\/p>\n
Officials handling private foreign debt have put it around $74
\nbillion, although some banking analysts have said the main risk
\namounts to around $35 billion.<\/p>\n
Ginandjar divided the debt issue into three:<\/p>\n
1. Companies that needed no assistance at any exchange rate;<\/p>\n
2. Debtors with good assets and viable projects that had
\nfallen victim to the economic climate;<\/p>\n
3. Companies that from the beginning were poor investments
\nwith no future prospects.<\/p>\n
He said debt restructuring efforts would be focused on the
\nsecond group.<\/p>\n
\"We will concentrate on the second category. The third
\ncategory will just have to go bankrupt, but creditors are at
\nfault for approving these kinds of projects,\" Ginandjar said.<\/p>\n
He said that April 30 was also the deadline for Indonesian
\ncompanies to declare their foreign debts so that the government
\ncould get a proper assessment of the amounts involved.<\/p>\n
\"It's like opening up Pandora's box, but we need to know,\"
\nGinandjar said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/minister-confident-reform-program-will-be-followed-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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