Debt-strangled Indonesia

Debt-strangled Indonesia

In the Jan. 21 article in The Jakarta Post by Mr. Rizal Ramli
(Debt trap and dependence in Argentina, Indonesia). Mr. Ramli
stated that, "In early October 1997, I wrote that the IMF would
not resolve the impending financial crisis, but would instead
plunge Indonesia into a deeper economic crisis."

It will never be in IMF's interest to see Indonesia recover
from its financial crisis. With all the advice, debt and debt
restructuring strategies from October 1997 until now, we should
have been able to see some results from the IMF already.

Isn't one of its purposes to bring about price stability,
political stability, and economic soundness?

Instead, what do we have? Ceaseless political bickering
between political parties, fighting in East Timor, and price
increases in fuel -- increases which, in turn, set the stage for
rises in food prices and many other basic necessities.

The IMF can continue to preach about good governance,
privatization, the eradication of corruption, collusion, and
nepotism (KKN).

But, in truth, all that the IMF is going after are the debt
and interest payments that are slowly strangling the Indonesian
economy -- so much so that it is almost impossible to achieve
political and economic stability here.

Mr. Ramli also stated that, "it was then that I realized that
not only did the IMF have no understanding of the Indonesian
political situation, but they basically did not think that it was
important."

Unfortunately, Mr. Ramli, I must beg to differ. There are many
talented individuals running the IMF, and they understand exactly
what is going on and what can happen to Indonesian politics and
the economy once their policies are implemented -- in the short-
term or long-term.

There are just so many other options that can help the
Indonesian economy out of the crisis.

We can, say, slap a hefty tax on the importation of luxury
items, we can encourage exportation of goods to other countries,
we can let all the weak and debt-ridden banks go under, in hope
that the strong ones can lead the countries out of the doldrums,
and so on and so forth.

The last thing Indonesia needs is debt; debt is the one
critical variable that has sent this country into a deep
financial crisis.

And as long there is a serious debt, Indonesia will continue
to be in trouble.

RONNY JAPUTRA

Business Strategist

Jakarta