Clinton and IMF dispatch top officials to RI
Clinton and IMF dispatch top officials to RI
WASHINGTON (Agencies): The Clinton administration and the International Monetary Fund, responding to a worsening economic crisis in Indonesia, dispatched top officials to Jakarta to discuss salvaging a faltering bailout effort.
President Clinton called Indonesian President Soeharto on Thursday night from Air Force One to discuss the economic situation after the Indonesian currency plunged to a record low earlier in the day.
During the 20-minute call, Clinton made it "quite clear that the IMF program needs to be followed," said a senior administration official, speaking to reporters on the condition of anonymity.
The White House said Deputy Treasury Secretary Lawrence Summers, the administration's point man on the Asian currency crisis, and a team of State Department and National Security Council officials would leave within the next few days for Indonesia and other countries in Asia.
White House spokesman Barry Toiv told reporters traveling with Clinton that the president had spoken to Singapore Prime Minister while on a fund-raising trip to New York and then with Suharto before departing for Texas.
"The president felt it was important that these sentiments expressed in the statement be expressed publicly at this time," Toiv said.
Earlier Thursday, the IMF announced that its managing director, Michel Camdessus, and Deputy Director Stanley Fischer were also being sent to Indonesia for emergency consultation.
The IMF said Fischer would head directly for Indonesia while Camdessus was expected to travel first to South Korea for a meeting Sunday in Seoul with President-elect Kim Dae-Jung and other officials.
South Korea, Indonesia and Thailand all received IMF rescue package last year.
The statements from the administration and the IMF Thursday held out a promise that a speed-up in Indonesia's US$ 40 billion program might follow if Soeharto's government pledges to follow the IMF austerity program.
The plunge of the Indonesian currency this week was triggered by release of a proposed government budget that financial markets viewed as falling short of the commitments Indonesia made to the IMF.
The IMF said in a statement that its officials would negotiate with the Indonesians "an acceleration of much-needed reforms already agreed upon under the IMF-supported" rescue program.
"We'd like to accelerate the program and strengthen it because a lot of people believe the Indonesian government wasn't really committed to the program," Fischer told CNN television, referring to the reforms underpinning the bailout.
He made clear IMF funding would stop if this did not take place. "The program cannot go ahead if the Indonesian government isn't supporting the measures that it said it would do," he said.
Indonesia's economy is "more worrisome" than South Korea's, Fischer said.
"Today it is more worrisome than South Korea which has stabilized in the last few days, but they are both big problems and they both bear constant watching," Fischer said in the interview on CNN.
Indonesia has already received $3 billion of the IMF's $10 billion portion of the bailout and a further $3 billion will be available after March 15, provided the country sticks to the reform program.
A record fall in Indonesia's currency Thursday sent stock markets across the region plunging sharply as investors liquidated portfolios. The rupiah plunged 26 percent and stocks on the Jakarta market dropped an average 12 percent Thursday - both one-day worsts.
The IMF said its management "believes that the recent depreciation of the rupiah represents a significant overreaction by the market."
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