IMF: Just like a commercial bank?

In reference to Mr. T.J. Addati's article IMF is not a good Samaritan in The Jakarta Post on April 2 and April 3, I would like to make the following comments.

Mr. Addati is definitely right. The IMF and the World Bank are not good Samaritans, they are not St. Nicholas and they are not charitable social institutions.

I think most, if not all people, who have a little knowledge of economics, finance and banking agree with Mr. Addati.

On the other hand, I, for one, never expected them to be good Samaritans. To me, (I am a layman and retired workshop mechanic) IMF and the World Bank are not much different from regular commercial banks, but with slightly lower interest rates.

To me a bank is a bank, an institution that lends money. Most banks make money from the interest on loans. Whether their main goal is to make a profit or not, I do not know.

Nevertheless banks are happy if the people borrowing money from them are also making profits. Banks would like to have a win-win relationship with their borrowers.

Once, I borrowed money from a bank. It charged me a steep interest rate. I bought a small business, got some sound advice from friends and worked very hard. In two years I paid off the bank loan including all the interest, and owned the business outright.

In the meantime, I earned enough every month to feed my family. The bank was happy because it made money. I was happy because I made money too.

At a different time, I borrowed money again (from the same bank). I bought a fancy sports car. My sensible half told me that I couldn't afford the car. My ego, though, told me to buy the car anyway, to be able to show off to my friends.

To make a long story short, in six months I had to quit paying the bank because my modest income could not handle the payments. The bank took my car away. I lost money. Certainly I was mad at the bank but, I had to admit, it was all my own fault.

Back to the IMF. If countries borrow money (IMF does give away money), then the government should wisely plan the use of the money and then proceed to use the money prudently for the good of the country.

If all goes well the country will benefit from the cooperation. I understand that IMF has rules and regulations, but so do commercial banks. Good banks don't lend money unless the borrower abides by the bank's rules.

On one side, these rules can be restrictive but, on the other side, they may be for the borrowers' own good.

I am convinced Indonesia's leaders know what they are doing, they most definitely have the welfare of the country and its population in mind.

I don't think Indonesia was forced to bring IMF in to resolve the current monetary crisis. The government sees the IMF as one of the institutions that can help Indonesia get out of the crisis. Whether or not the IMF is the right institution to help remains to be seen. Who am I to judge?

DJOKO SOEJOTO

Bandung, West Java