Ginandjar, IMF discuss reform programs

Ginandjar, IMF discuss reform programs

WASHINGTON (Dow Jones): Ginandjar Kartasasmita, Indonesia's coordinating minister for economics, finance and industry, said Monday after a meeting with IMF Managing Director Michel Camdessus that they discussed the challenges still facing the Indonesian government in its reform program, particularly combating corruption and devising a new "mechanism" for proceeding with corporate bankruptcies.

Ginandjar reiterated his opposition to the introduction of capital controls or any alteration of the floating system for the rupiah as means of encouraging bringing greater stability in local financial markets.

"Definitely we are not going to follow that direction," he told reporters when asked whether he favored the kind of capital controls adopted by Malaysia during the Asian financial crisis.

He said Indonesia's economy isn't the same as Malaysia's and that he had "philosophical" objections to such curbs on market freedom.

Ginandjar said Indonesia's strategy to rescue the economy from its current slide remains "on track" and that both Camdessus and Wolfensohn remain supportive of his government's plans.

He said the government has made ground in stabilizing the rupiah, bringing down inflation and lowering interest rates.

The "very important agenda" now facing the government, Ginandjar said, contains three goals: the restructuring of the banking sector; confronting the massive debt burden carried by the private sector; and conducting general elections in June.

On bank restructuring, Ginandjar said a list of Indonesian banks that will face closure under new capital requirement guidelines will be finalized by the end of February or early March and the process of refinancing or closing individual banks should be underway before the election in June.