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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