Economists say RI is better off without IMF
Dadan Wijaksana, The Jakarta Post, Jakarta
Campaigns to end the role of the International Monetary Fund (IMF) in the country intensified on Wednesday after a group of 35 leading economists said the economy would fare better without the IMF.
Rizal Ramli, former chief economic minister who leads the coalition, told reporters that once the IMF gets its hands off Indonesia, the economy would expand stronger and even return to pre-crisis levels of around 7 percent by 2005.
"The sooner Indonesia parts with the IMF the better for the economy, as without the IMF means that we have the flexibility to do a lot of things," Rizal said, adding that Indonesia hardly benefited from the presence of the IMF as most of its programs had simply pushed the economy deeper into crisis.
His remarks pour fuel on the prolonged debate over whether the country should extend its economic reform program with the IMF when it expires by the end of the year.
Signed in 1999, the program allows the country to obtain around US$5 billion in loans in return for implementing a number of key economic reforms.
The involvement of the IMF was meant to help Indonesia's economy get back on track after the 1997 financial crisis.
The IMF assistance has benefited the country, not only in terms of financial aid, but also in terms of gaining support from other foreign countries and institutions for debt relief purposes -- such as the Paris Club and the London Club -- whose judgments on Indonesia's economy are always based on the IMF's assessment.
And since the cash-strapped country is still highly dependent on the foreign debt rescheduling facilities, many have raised the need for the government to extend the IMF's role in the country. Currently, the country's outstanding sovereign debt amounts to around $74 billion.
However, Rizal said such arguments were baseless.
"We are a rich-resource country. If we could maximize that, who needs the Paris Club and others, we could even generate a huge amount of funds of our own to stimulate the economy."
Rizal said there are currently various on-hand funding sources available that could generate huge revenues to finance economic activities, without having to beg other countries or institutions.
"If we are serious, in the next three years, we can generate a total of Rp 524 trillion (US$58 billion) from domestic sources, which we can use to generate higher growth through stimulus".
Of the total, he went on, some Rp 96 trillion could easily be generated directly from sources such as funds that are stashed in "account No. 69," and investment funds account (RDI).
Account 69 is where the government amasses the gains coming from the margin of oil revenues between the actual prices and the ones targeted in the state budget.
Elsewhere, Rizal said the coalition groups together around 35 economic experts from various institutions. Included are Didik J. Rachbini, Hartoyo Wignyowiyoto, Revrisond Baswir, Sri Edi Swasono, Aviliani and Dradjat Wibowo.