IMF denies being slow in helping ASEAN

IMF denies being slow in helping ASEAN

JAKARTA (JP): The International Monetary Fund (IMF) denied
President Soeharto's criticism yesterday that it was slow in
assisting Association of Southeast Asian Nations (ASEAN) members
deal with the region's currency upheaval.

IMF first deputy managing director Stanley Fischer said IMF
would provide financial assistance if there was an official
requirement.

"I think it is simply not correct... Once the government is
willing to act, the IMF can move very fast," Fischer said after
meeting with President Soeharto at Merdeka Palace.

On Tuesday, Muchtar Mandala, president of publicly listed Bank
Duta, quoted Soeharto as saying that IMF often acted slowly in
offering help when a country was dying.

"The President expected the world body to deregulate its
complicated procedures to accelerate its mission to help needy
countries," Muchtar said after meeting the President.

Fischer said his organization needed less than three weeks to
decide on the US$17.2 billion rescue package to help Thailand
last month when its government decided to seek emergency aid from
the IMF after the baht drastically dropped against the U.S.
dollar.

The bailout, supported by Japan and seven other Asian
governments, was the world's largest operation after the $50
billion rescue deal for Mexico two years ago.

"Thailand had to make the decision when to deal with its
problems, the IMF was willing to help from the beginning,"
Fischer said.

Southeast Asian currencies have been under speculative attacks
since the Thai government devalued its baht early in July. Rupiah
has declined by about 20 percent against the U.S. dollar since
then.

During the meeting, Soeharto was accompanied by Minister of
Finance Mar'ie Muhammad, Bank Indonesia Governor J. Soedradjad
Djiwandono and Minister/State Secretary Moerdiono. Fischer was
accompanied by deputy director of the IMF Asia-Pacific Department
Bijan Aghevly.

Moerdiono said Soeharto deeply appreciated IMF and pledged his
commitment to continue to closely cooperate with the agency.

"Muchtar's statement does not fully reflect the President's
view toward IMF," he told reporters.

Fischer praised the government for taking measures in the
foreign exchange market to stabilize the rupiah and postpone mega
projects to minimize the impact of the currency's sharp
depreciation.

"I think the measures announced by your minister of finance is
an important second step along the road. I believe that Indonesia
will decide to move ahead and then takes further reforms," he
added.

Mar'ie announced Tuesday the postponement of $35.6 billion
worth of government and state-related projects as part of drastic
measures to cope with the currency crisis.

In announcing the World Economic Outlook, jointly issued by
the World Bank and IMF yesterday in Hong Kong, IMF Research
Director Michael Mussa predicted that economic growth in
Indonesia, Malaysia and the Philippines would fall by 4 percent
between 1997 and 1998 and Thailand would slump 8 percent.

According to AP, the report said Asian governments should
blame themselves for the recent currency crisis.

"Governments failed to take strong action when weakness
surfaced, and when they did act, it was too late to prevent a
crisis," said the report, adding that investors might have also
overreacted in pulling out of Asian markets.

Fischer suggested Indonesia strengthen its financial sector to
protect the economy against further speculative attacks on
rupiah.

"The most important thing to do to protect against speculators
is not to give them a target to shoot, that means pursuing good
economic policies," he remarked. (prb)

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