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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