IMF assistance still needed, say economists

IMF assistance still needed, say economists

Dadan Wijaksana, The Jakarta Post, Jakarta

Economists urged legislators and the government to join hands in
implementing difficult economic reform programs in order for the
country to achieve a quick recovery, and not waste time and
energy in quarreling about the role of the International Monetary
Fund (IMF) here.

"Continuing or discontinuing the role of the IMF in the
country does not really matter when the real problems are coming
from within ourselves," Sjahrir, a well-known economist, told a
hearing with the House of Representatives Commission IX, which
oversees financial affairs, on Tuesday.

The legislators invited Sjahrir, along with seven other noted
economists, to seek input on whether the country still needed the
Fund's assistance to overcome the prolonged economic crisis.

Sjahrir added that it was becoming a habit now for the country
to always seek a scapegoat whenever something went wrong.

"It's not the IMF that is the problem, but it is we who have
been slow in implementing the recovery programs," Raden Pardede
of the Danareksa Research Institute, added.

The pros and cons are being increasingly debated over the role
of the IMF, mostly triggered by a series of sharp criticisms made
by State Minister of National Development Planning Kwik Kian Gie.

Moving against the direction of his fellow economics
ministers, Kwik has not been hesitant in attacking some of the
government's key policies that have been agreed with the Fund.

Kwik's publicly-documented criticisms of the IMF have led to a
public debate with other economic ministers led by Coordinating
Minister for the Economy Dorodjatun Kuntjoro-Jakti, who has
repeatedly stressed the need for the country to maintain its
relationship with the Fund.

Dorodjatun says the IMF's role is important for the country's
recovery as it not only provides loans but more importantly it
served as a barometer for other countries and international
institutions in lending to Indonesia in terms of debt
rescheduling and even proffering new loans.

The IMF is organizing a three-year US$5 billion loan package
for the country in return for the implementation of various
reform programs. The IMF program was supposed to end in November
2002, but Minister of Finance Boediono has extended the program
into end of 2003.

However, Kwik, who has started to gain nationwide support,
including that of prominent figures such as the Speaker of the
People's Consultative Assembly Amien Rais, is of the opinion that
the efforts towards economic recovery could still progress
without the help of the IMF.

As the public debate seems likely to continue to be strenuous,
allegations are rife that the cabinet is on the brink of
cracking, putting more pressure on the already strained economy.
It is against this background that the house decided to invite
the economists to give their views.

All the economists present at the House hearing were agreed
that in principle the sooner the country dismantled its
relationship with the IMF the better, as long as there was a
clear concept on how to achieve a quick recovery and there was a
high level of discipline from all elements of the country in
implementing tough reform programs.

"There is not a single nation in this world who wants to keep
its relationship with the IMF for a long time. However, since the
contract has been signed, why not honor it. Cutting the
relationship in midway would risk our credibility," Umar Juoro of
the Center for Information and Development Studies (CIDES) said.

"The question is not dismantling the IMF agreement, but how to
utilize it," Pande Radja Silalahi of the Centre for Strategic and
International Studies (CSIS) added.