IMF 'not to blame' for Indonesian unrest

IMF 'not to blame' for Indonesian unrest

WASHINGTON (Reuters): U.S. House Minority Leader Richard
Gephardt on Thursday defended the International Monetary Fund's
reform program in Indonesia, saying it was not too tough and not
to blame for outbreaks of violence.

"I don't think there are riots in Indonesia because of what
the IMF has asked," the Missouri Democrat told reporters. "I
think there are riots in Indonesia because they have practiced
crony capitalism for as long as anybody can remember."

"I think the IMF is doing its dead level best," he said.

Anti-government demonstrations in Indonesia intensified this
week after the government raised fuel and transportation prices
in line with an agreement with the IMF. Students are demanding
that aging President Soeharto quit to take responsibility for
Indonesia's ravaging economic crisis.

Gephardt defended the IMF-mandated price increases, sought as
a condition for the release of a US$1 billion installment of a
$40 billion rescue package arranged by the lending agency.

"The IMF is trying its best to both bring about a
stabilization of these countries' economies and bring about
sensible change in the way their countries operate," he said.

Gephardt said the reforms were not too tough and were needed
to correct Indonesia's economic course.

"The IMF is asking for decent, slow change," he said.
"Frankly, if there is not change in Indonesia, if you simply
write them a blank check, you're sending good money after bad."

"They're trying to figure out the best things to do for the
future of these countries, and I am more than willing to have
America be a part of that. I will vote for that. I believe in
that," he said.

Earlier this week, the IMF agreed to resume loan payments for
Indonesia over objections from some U.S. lawmakers, who say IMF
programs ignore human rights violations and neglect the needs of
the poor.

U.S. Treasury Secretary Robert Rubin on Thursday urged
President Soeharto to show restraint in dealing with social
unrest. The U.S. State Department has also urged authorities to
let peaceful protests take place.

Massachusetts Rep. Barney Frank, a senior Democrat on the
House Banking Committee, said the IMF's decision to resume
bailout payments had sent "exactly the wrong message to the
Indonesian government and the opposition in Indonesia."

He warned that the decision could make it more difficult for
the White House to convince Congress to approve an $18 billion
funding package to replenish the IMF's reserves.

The White House needs support from Democrats in the House, and
especially from Gephardt, because many Republicans oppose the
funding.