IMF aid package may be sealed by the weekend

JAKARTA (JP): Minister of Finance Mar'ie Muhammad said yesterday that the government would soon announce the outcome of the IMF-led financial package to restore market confidence in the country's economy.

"We will announce it at the right time, hopefully soon," he was quoted by Antara as saying.

Rumors at currency and stock markets said the government initially planned to announce the results of negotiations between government officials and the IMF-led team yesterday.

Some analysts predicted the government would announce details and conditions of the IMF-led financial assistance on Monday.

Former finance minister Radius Prawiro, one of Indonesia's negotiators, said separately that negotiations should be completed by the weekend.

"We should wait (for the outcome) this weekend or by the end of this month," he said.

When asked on the possible outcome of the negotiations, Radius said: "That's what we are waiting for. But you can judge it by looking at my facial expression. How is my facial expression?"

"Bright," answered a journalist.

Radius, also former coordinating minister for economy and finance, said Indonesia's economy would recover once the government restored market confidence with IMF's assistance.

Economist Nyoman Moena shared Radius' view, saying the IMF package would send a strong positive sentiment, not only to Indonesia, but also to the entire Southeast Asian region.

He predicted that the result of negotiations would be positive, as the IMF also had an interest to conclude them with some tangible results.

"The IMF's conditions will not be very hard because they will be for the benefit of the country. Besides, we are an IMF member, and it is the IMF's duty to help its members," Moena said.

Although Indonesia had received some bilateral aid commitments, it still needed financial assistance from the IMF to restore market confidence, he said.

"I think some countries are interested in giving financial aid to Indonesia because the IMF is involved," he said.

Indonesia has bilateral aid commitments from Malaysia, Singapore, Japan and Australia. Only Malaysia has said its aid would be outside the IMF package.

Malaysia has committed US$1 billion and Singapore $10 billion.

Sources close to the negotiations said the IMF financial package would not exceed $10 billion.

Some analysts said Indonesia had sought bilateral financial assistance to give more weight to its position in negotiations with the IMF.

But Radius rejected the assumption, saying that bilateral aid commitments made by Indonesia's neighboring countries, especially Malaysia and Singapore, were to strengthen cooperation between members of the Association of Southeast Asian Nations (ASEAN).

"This does not mean that Indonesia bluffed the IMF. We help each other because we need each other," Radius said.

He said if Indonesia's economy recovered, it would also benefit Malaysia and Singapore.

Analyst Laksamana Sukardi agreed and said Singapore's economy was especially dependent on Indonesia's since it was mostly Indonesians who went to Mount Elizabeth Hospital, shopped at Singaporean supermarkets and placed their funds in Singapore banks.

"Therefore, it is only logical that Singapore offered Indonesia US$10 billion in assistance as it has reaped many benefits from Indonesia's economy, and it also has an interest in helping Indonesia's economy recover," Laksamana said. (08/aly/rid)