G7 urges RI to stick to reform program
G7 urges RI to stick to reform program
WASHINGTON (Reuters): The Group of Seven rich industrialized
nations on Wednesday welcomed Indonesia's latest package of
reforms and said Jakarta had to keep its economic promises to win
back market confidence.
"We urged the Indonesian government to implement its program
fully and vigorously as this is necessary to restore confidence,"
the G7 -- Britain, Canada, France, Germany, Italy, Japan and the
United States -- said in a communique released after a meeting in
Washington.
The brief statement sent a strong message to Indonesian
President Suharto, who has come under fire for dithering on two
previous reform agreements with the IMF.
The communique was issued as Indonesian officials met in New
York with lenders to work out how to restructure a $67 billion
mountain of corporate debt.
IMF chief economist Michael Mussa told Reuters that the fund
was not directly involved in the negotiations, but was watching
closely to ensure that a result was in line with the terms of the
IMF-sponsored reform plan.
"It's not something where...we are going to be the authors or
underwriters of the plan," Mussa said. "We want to make sure that
the plan that's put in place is consistent with the fund program
and satisfies certain other important criteria."
Mussa said the framework of Indonesia's corporate debt
rescheduling could be ready within weeks, although "individual
arrangements" could take months.
The IMF masterminded a $40 billion rescue package for
Indonesia last year, but it suspended payments in March amid
doubts about Indonesia's commitment to reform.
The 117-point revised reform program sets target dates for
implementing key reforms. If it is fully implemented the reforms
will overhaul the way business is done in Indonesia.
"We welcomed Indonesia's renewed commitment to economic and
structural reforms and its agreement with the IMF on a new reform
program," the G7 communique said.
IMF Managing Director Michel Camdessus has already said he is
confident the new package will work. "This time we have an
excellent program," he told a news conference on Tuesday, noting
that Indonesia was well aware of the heavy price it would pay if
it again fell behind on reforms.