IMF loan delay upsets legislators

JAKARTA (JP): The People's Consultative Assembly (MPR) members had strong words yesterday for the International Monetary Fund's (IMF) decision to delay its loans to Indonesia, arguing that national dignity was more important than bowing to international pressure.

Several prominent Assembly members, including four of President Soeharto's children, accused the IMF of forcing Indonesia to abide by its rules without taking into consideration the country's dire situation.

Their statements came after Soeharto suggested Sunday that the IMF's economic reforms were not in line with the 1945 Constitution.

On Friday the IMF effectively delayed the second installment of its $43-billion-bailout package to Indonesia. This tranche, worth $3 billion, was originally scheduled to be issued by March 15.

Yesterday's stern messages echoed the increasingly dissatisfied grumblings from various quarters against the IMF.

"The rupiah may crumble, but our dignity must not," Jusuf Kalla, a noted businessman from South Sulawesi, said on the sidelines of the plenary session.

Jusuf, a member of the regional representatives faction, said the IMF should not dictate Indonesia as if it were an equal member of the international organization.

Soeharto's second daughter Siti Hediati Prabowo said yesterday that her father's move was possibly a reaction to the mounting pressures he had had to endure recently.

"We do need the IMF, yes, but not if we are continually being repressed with this-and-that conditions," Siti Hediati, known as Titik, said. "We are a sovereign nation and we have our dignity. Maybe that was what's on father's mind."

Political move

The deputy chairman of Indonesia's Chamber of Commerce and Industry, Iman Taufik, suggested the IMF's decision was a political move.

"The move is bias, you have to question whether it is purely the IMF's or the United States'," he said yesterday.

Soeharto's youngest son, Hutomo Mandala Putra, said the IMF's latest move was "intentional". He refused to elaborate further saying only: "We have fulfilled the letter of intent, why does the IMF still delay the fund disbursement?"

President Soeharto signed a letter of intent in January to the IMF promising various economic reforms.

But he recently argued that the move had failed to stabilize the depreciating rupiah.

Soeharto's recent proposal to peg the rupiah to a certain fixed rate against a foreign currency has met strong opposition from the IMF and donor countries, which have urged Indonesia to stick with the reform program.

On Sunday Soeharto even went so far as to suggest that the IMF reforms were based on liberal economic principles, and not in tune with Indonesia's economy which was based on family principles.

The chairman of the Armed Forces faction in the House of Representatives, Lt. Gen. Hari Sabarno, reiterated the same comments yesterday.

"It does not go along with the familial spirit of Indonesia's economy," Hari said.

Soeharto's second son Bambang Trihatmodjo urged the government to revise the reform package to further suit the country's situation.

Asked if the IMF might cancel the financial aid should the government revise the reform program, Bambang merely replied: "Do we want to keep being dictated by foreign parties?"

The secretary-general of the ruling Golkar faction, Ary Mardjono, said the IMF was not Indonesia's sole donor, adding that Japan, and its neighboring countries in the region could help the country.

"A country's pride and dignity must be respected in international ethics," he said.

Soeharto's eldest daughter Siti Hardiyanti Rukmana, known as Tutut, agreed that Indonesia needed foreign funds, but "those which would not tie us".

"If the funds sacrifice and degrade our nation's dignity, we do not want them," Tutut said.

Noted businessman and assembly member Tanri Abeng said the growing impasse between the IMF and Indonesia was maybe a question of perception on the implementation of economic reforms.

"There is a knowledge gap, the IMF may not understand the mechanism of our economy," Tanri, also a member of Soeharto- headed Economic and Monetary Resilience Council, said.

"Both parties need to sit down and have a careful discussion to sort out all the technical aspects and differences," he said.

Prudent words also came from Foreign Minister Ali Alatas who affirmed that Indonesia would implement the 50 points agreed in the letter of intent.

"(But) We need time before we can start implementing them because the nation is currently concentrating on the constitutional process of the General Session," he said, adding that the reforms would resume after the new cabinet was formed.

Assembly member and senior bank analyst Thomas Suyatno said Indonesia had to move wisely if it could no longer rely on the IMF.

As the country's foreign exchange reserves were drying out, it must use the rest of the reserves optimally, he said, adding that reserves must be used to import people's basic needs, medicines and capital goods that could open more employment opportunities.

But Thomas said he was sure the IMF would not back away from its promised assistance. (byg/das/imn)