IMF monitoring role still crucial: Kadin
IMF monitoring role still crucial: Kadin
A'an Suryana, The Jakarta Post, Jakarta
The Indonesian Chamber of Commerce and Industry (Kadin) said
on Wednesday that Indonesia still needed the International
Monetary Fund to play a monitoring role in the implementation of
the country's economic reform program to help instill investor
confidence.
Kadin chairman Aburizal Bakrie said that there was still doubt
among investors and the financial market on whether the
government had the necessary discipline to carry out tough reform
measures without someone credible monitoring it.
Speaking on the sidelines of the Golkar Party's national
convention, he also supported calls for the government not to
extend the current IMF-sponsored program when it expires at the
end of this year.
"But we still need someone to monitor the (reform) program ...
It can be either the IMF or the World Bank," he said.
This is the first statement from Kadin over the debate on
whether Indonesia should extend the existing IMF program
introduced in 1999.
Critics have said that the current program provides IMF with a
dominant role in designing what economic reforms should be
carried out by the government in exchange for the disbursement of
the fund's money. They also argue that the IMF programs had
failed to fix the country's economic woes.
It appears probable that the government will heed a recent
People's Consultative Assembly (MPR) decree instructing the
government not to extend the program. Pressure from politicians
against an extension is also mounting.
The issue now is whether the IMF can still play a role in
helping maintain international support for the country's economy.
The government has set up a special team to explore the
various options.
Analysts have said that without the IMF program, Indonesia
will not be able to gain the approval of the Paris Club of
creditor nations for debt restructuring loans, creating a threat
to the country's fiscal system. The amount of debt maturing in
2004 alone is about US$3 billion.
A number of analysts have also proposed a post-program
monitoring role for the IMF, arguing that without a credible
international institution monitoring the government program, it
would be hard to earn international investor confidence in the
program, which is crucial both in attracting foreign investment
and maintaining the stability of the rupiah.
Separately, Minister of Finance Boediono said that the
decision on whether Indonesia would extend the current IMF
program would be made by the Cabinet, not by an individual
minister.
Former chief economics minister Rizal Ramli recently accused
Boediono and Bank Indonesia Governor Sjahril Sabirin of telling
the IMF at a recent meeting in Washington that Indonesia was
ready to extend the current program to 2005.