IMF aid package may be sealed by the weekend

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)