IMF and WB ready to work with new RI government

IMF and WB ready to work with new RI government

WASHINGTON (Reuters): The World Bank and International Monetary Fund congratulated Indonesia's new president on Wednesday and said they were ready to work with the government there to realize Indonesia's immense potential.

Statements issued after ailing Muslim leader Abdurrahman Wahid won Indonesia's first contested presidential election, beating the popular favorite Megawati Soekarnoputri, said the vote was a watershed for the troubled Asian country.

"I congratulate Mr Abdurrahman Wahid on his election as Indonesia's fourth president," IMF Managing Director Michel Camdessus said.

"The IMF looks forward to working with the new president and his administration on building on the macroeconomic gains achieved so far.... Indonesia has immense economic potential, which the IMF is determined to help the new government fully realize."

Low inflation, falling interest rates and a stable currency provided a good basis to restore international confidence in Indonesia, Camdessus added.

Indonesia is still seeking funds from a US$45 billion international rescue package put together two years ago, as the country struggled to cope with a crashing currency, rising debts and a collapsing economy.

But the IMF put its cash to Indonesia on hold earlier this year amid a scandal surrounding payments from Bank Bali to members of the Golkar party of former president B.J. Habibie. The fund wants Indonesia to publish an independent audit of the bank and to prosecute anyone involved in wrong-doing.

The 1997 rescue package also includes billions of dollars from the World Bank and bank officials said in a separate statement they were ready to help Wahid's new government develop a program for a successful economy.

"I extend my sincerest congratulations to the newly elected president of the Republic of Indonesia," said World Bank President James Wolfensohn. "The peaceful conclusion of Indonesia's first truly democratic general election represents a momentous occasion in the country's history and an important watershed for East Asia."

Wolfensohn told Wahid in a letter that the World Bank wanted to help Indonesia make the best use of its "tremendous human and natural resources." "We recognize that Indonesia faces many economic challenges, some of which require resolution in the very short term," he said.

The IMF on Tuesday welcomed an Indonesian decision to approve publication of the Bank Bali audit as a "first step and a crucial turning point" in freeing up new cash.

A spokesman said the IMF would soon set a date to send a new team to Indonesia to examine the economy and decide whether to recommend new payments from the existing loan.

The Bank Bali scandal badly damaged former leader Habibie's already weak image ahead of the presidential election. Parliament rejected his policies at a early-morning session earlier this week and then elected Wahid in a surprise vote.