Rizal says IMF is too pushy<\/p>\n
JAKARTA (Agencies): Indonesia on Thursday complained that the
\nleader of its bailout program, the IMF, was pressing it too hard,
\nsaying it was difficult to implement every reform while the
\ncountry was going through its unruly transition to democracy.<\/p>\n
The International Monetary Fund (IMF) has refused to hand over
\nmore money out of its US$5 billion bailout fund until Jakarta
\nsettles questions of regional government borrowing, attempts to
\nchange the central bank law and sells stakes in two major retail
\nbanks.<\/p>\n
\"We got that feeling,\" chief economics minister Rizal Ramli
\ntold foreign reporters, when asked if he believed the IMF was
\nbeing too pushy. He added he had already raised the point with
\nthe Fund.<\/p>\n
\"I told him (IMF deputy managing director Stanley Fischer)
\nthat this is not an authoritarian regime any more,\" he said in
\nreference to the long autocratic rule of former president
\nSoeharto.<\/p>\n
His comments came amid the still uncertain date of the third
\ndisbursement of IMF's $400 million loan, originally due last
\nDecember.<\/p>\n
The government, stumbling through repeated political squabbles
\nthat distract it from the economy, argues that it is doing quite
\nwell given the massive challenge of shifting from decades of
\ncorrupt despotism to a democratic system.<\/p>\n
\"I'm not happy because the speed (of reform) is not
\nenough...(but) at least we are on the right track,\" said Rizal.<\/p>\n
He said he hoped the sales of stakes in major banks Bank
\nCentral Asia (BCA) and Bank Niaga would be done by June as the
\nIMF wants.<\/p>\n
But on the issues of borrowing by newly autonomous regions and
\nthe controversial changes Jakarta wants in the central bank law,
\nRizal showed little sign of bending to the IMF will.<\/p>\n
The changes to the central bank law have been criticized for
\nbeing poorly drafted and some have accused President Abdurrahman
\nWahid of being motivated more by a desire to settle a personal
\nscore with the governor whom he wants sacked.<\/p>\n
Most of the central bank board has already resigned and
\ngovernor Sjahril Sabirin, who refuses to step down, is currently
\non trial over graft charges. He has denied wrongdoing.<\/p>\n
The institution has been at the center of allegations of
\nmassive corruption and Ramli said it needed to be cleaned up
\nfirst, forced to be accountable and then handed its independence.
\nThe government wants to sack the whole board.<\/p>\n
Rizal also said Jakarta could not ban regional governments
\nfrom borrowing. Those comments appear at odds with remarks he
\nmade on Monday, when he said a decree had been issued banning
\nregions from borrowing from local or international sources.<\/p>\n
The IMF fears such borrowings would only plunge the country
\ndeeper into debt at a time when it is already struggling to pay
\nits creditors.<\/p>\n
\"I fully understand the IMF's position that local governments
\ncan't borrow,\" Ramli said.<\/p>\n
But he said the law was already in place under a previous
\ngovernment and that authorities could not simply override that.<\/p>\n
\"We can't explicitly say local governments can't borrow. We'd
\nlike to amend the law, but not today...(maybe) next year.\"<\/p>\n
In the meantime, the government can insist that any offshore
\nborrowing has approval of the finance ministry, which has also
\nwarned local banks not to lend to the regions.<\/p>\n
Indonesia is also under heavy pressure to end large subsidies
\non fuel, which many critics say benefit the wealthy as much as
\nthe impoverished masses they are meant to help.<\/p>\n
\"I still expect we can do this by early April,\" Rizal said,
\nadding the increase had to be implemented because it was already
\nin this year's budget.<\/p>\n
But he called it a question of timing, saying it would be
\n\"suicidal\" to go ahead if there were widespread protests.<\/p>\n
IBRA oversight<\/p>\n
Separately, Rizal rejected on Thursday calls from legislators
\nto dissolve the Finance Sector Policy Committee (FSPC), and
\ndenied claims that the committee was meddling with the Indonesian
\nBank Restructuring Agency's (IBRA) works.<\/p>\n
According to Rizal, the FSPC had only interfered in large
\nrestructuring programs involving family members of former
\npresident Soeharto.<\/p>\n
Restructuring programs worth more than Rp 1 trillion (about
\nUS$105 million) should have been reported to the FSPC, he said.<\/p>\n
According to him, the restructuring programs of Soeharto's
\nfamily businesses were worth well over Rp 1 trillion but IBRA
\nnever reported them to FSPC.<\/p>\n
\"It turned out that IBRA split the programs into smaller ones,
\nand restructured them separately,\" Rizal told reporters after
\nopening a banking symposium on small and medium size enterprises
\nheld by the National Private Banks Association (Perbanas).<\/p>\n
He was responding to legislators' criticism that FSPC had
\nmeddled too much in IBRA's work, and thus should be terminated.<\/p>\n
FSPC has the final say on major bank and corporate
\nrestructuring programs. Led by Rizal, the committee, formed last
\nyear to ensure good corporate governance at IBRA, groups together
\neconomic ministers.<\/p>\n
But legislators called FSPC ineffective, saying that it
\nintervened too frequently in IBRA.<\/p>\n
Legislators fear that FSPC intervention involved
\nrestructuring deals worth less than IBRA's Rp 1 trillion limit.<\/p>\n
IBRA is in charge of restructuring debts and the sale of
\nassets worth over Rp 600 trillion taken over from closed down,
\nnationalized and recapitalized banks.(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rizal-says-imf-is-too-pushy-1447893297",
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