Clinton wants RI to stick to IMF plan

JAKARTA (JP): U.S. President Bill Clinton said yesterday that pursuing economic reforms agreed with the International Monetary Fund (IMF) remained the best way for Indonesia to overcome the economic crisis.

The message was conveyed by Clinton's special emissary Walter Mondale during a meeting to discuss the crisis with President Soeharto at the latter's Jl. Cendana residence.

"I emphasized President Clinton's judgment that the central step to restoring confidence is full, demonstrable and vigorous implementation of IMF reforms," Mondale, a former U.S. vice president, told reporters after the meeting.

"It is this that offers the best prospect for restoring financial stability and economic growth to Indonesia. It's worked in other countries. It's worked in the past here in Indonesia and it will work again if put in place and fully implemented."

Many foreign leaders, including Clinton, have expressed concerns that Jakarta's plan to stabilize the rupiah using a currency board system (CBS) runs counter to the reform program Soeharto agreed to pursue with the IMF.

Soeharto has promised to carry out sweeping economic reforms -- including dismantling business monopolies and cartels, and phasing out subsidies -- in return for a US$43 billion international rescue package organized by the IMF.

Mondale held a 90-minute meeting with the President. In the first hour, they were accompanied by aides. Mondale then held a private meeting with Soeharto for the remaining time. He declined to give details of the private meeting.

Taking part in the first meeting were Minister of Foreign Affairs Ali Alatas, Minister/State Secretary Moerdiono, U.S. Treasury Undersecretary David Lipton, Assistant U.S. Secretary of State for East Asian and Pacific affairs Stanley Roth, and U.S. ambassador Stapleton Roy.

Mondale said he had come bearing a "confidential" message from Clinton, but that the basic purpose of the visit was to ensure that Indonesia continued to implement the IMF guidelines.

He described his meeting with Soeharto as excellent and candid.

Earlier reports from Washington suggested that Clinton had given Mondale a mandate to discuss political as well as economic issues with Soeharto.

Moerdiono told reporters separately however that there were no political messages whatsoever from Clinton.

"I talked to one of the delegates, and (he) said that it was not Clinton's style to do so. This was mere press speculation. Politics is the affair of our sovereign nation," he said.

Moerdiono said there was no discussion of the choice of vice president or the line up of the next cabinet. "That's not what this mission was about .. It was purely economics," he said.

Mondale said that Clinton, who has talked several times to Soeharto on the telephone in recent weeks, was deeply concerned about the economic hardships the Indonesian people faced.

On the CBS plan, which also came up in the discussion, Mondale said: "It's our view that the way to deal with the severe currency problems here is to deal with the underlying forces that are driving the rupiah toward its weakness."

"There are no quick fixes that provide an alternative."

"If these fundamental IMF undertakings by Indonesia are implemented vigorously, they will help restore confidence and the stability. That is the best answer to these questions."

Soeharto has not made any firm commitment to the CBS plan, but in his speech before the People's Consultative Assembly on Sunday he said that he did not see any signs of improvement in the rupiah exchange rate despite the IMFs reform package.

He urged the IMF and other foreign donors to find a more appropriate alternative, which he called "IMF-Plus". But he did not elaborate on the concept, and left people wondering whether it included adopting a currency board.

Soeharto also reaffirmed his commitment to carry out the IMF reforms, a point that he repeated to Mondale yesterday.

Moerdiono said that Soeharto explained the IMF-Plus concept to Mondale. "The `plus' refers to ways of bringing the rupiah to a stable and normal level," he said without elaborating.

Moerdiono also denied a recent report by a local news magazine suggesting that the United States was planning to set up military bases on some Indonesian islands.

"The topic never came up. But not a single inch of Indonesian territory is available for foreign bases," he said. (prb/emb)