IMF team due here for fresh talks
IMF team due here for fresh talks
JAKARTA (JP): The government will not send a team to
Washington next week but will instead hold talks with
International Monetary Fund (IMF) officials due here soon to
review the implementation of reforms, Indonesian and IMF sources
said yesterday.
Director General of Taxes Fuad Bawazier, strongly rumored as
the next finance minister, said the IMF team would arrive here
soon after the announcement of the new cabinet slated for
tomorrow.
"Since the beginning, there has never been any plan that Pak
Widjojo (Nitisastro) would lead a delegation to Washington,"
added Fuad, who is also deputy secretary-general of the
President's Economic and Monetary Resilience Council, after a
meeting at Bank Indonesia yesterday.
Widjojo is the council's secretary-general.
Fuad said yesterday the IMF normally conducted the review of
its bailout programs in the country receiving aid and not at its
headquarters in Washington.
Fuad himself disclosed Tuesday a plan to send a technical team
to Washington to negotiate with the IMF and the U.S. government.
An IMF source in Jakarta confirmed yesterday the imminent
arrival of an IMF team here which would be headed by one of the
institution's senior executives.
Flexibility
In Manila the World Bank's chief economist, Joseph Stiglitz,
was quoted by Reuters as saying yesterday he expected the IMF to
show flexibility over Indonesia's proposal to set up a currency
board.
"All international institutions and economists realize that
they have to adjust their programs as more information comes
out," Stiglitz told a news conference in Manila.
But Stiglitz reemphasized that President Soeharto must move
quickly to restore confidence in his troubled nation, warning
social conditions could worsen and further unsettle the region.
He said the only way for Indonesia to end a standoff with the
IMF over conditions tied to a multi-billion-dollar aid package
was to implement the structural reforms required by the fund.
"I think obviously the logjam is most easily addressed by
making sure that the reforms that have been agreed (on are)
implemented," he said on the sidelines of a forum on the Asian
crisis organized by the World Bank and Asian Development Bank
(ADB).
Indonesia has repeatedly said it is preparing to set up a
currency board, which would peg the rupiah to a hard currency.
The IMF, which strongly opposes the plan, threatened last
month to delay releasing aid and announced last week that funds
scheduled to be delivered in March would be delayed at least
until April.
Stiglitz said Indonesia was reeling under the impact of sharp
currency devaluation, falling oil prices and drought, which was
forcing the troubled nation of 200 million to import foodgrains.
Oil prices have plunged worldwide in recent months. Indonesia,
the only Asian member of the Organization of Petroleum Exporting
Countries (OPEC), is entitled to produce 1.456 million barrels
per day.
The rupiah has lost more than 70 percent of its value against
the dollar since last July.
Indonesian economist Mari Pangestu earlier told the conference
on East Asia in Manila that Indonesia was not in a position to
undertake the dramatic political and economic reforms that South
Korea and Thailand had implemented.
Pangestu, a senior economist at the Centre for Strategic and
International Studies in Jakarta, said "the (short-term) answer
is we have to bring back a lot of capital," but she noted that
the dispute with the IMF and the Indonesian leader's insistence
to peg the rupiah currency to the U.S. dollar were delaying the
infusion of fresh funds.
"We have to find intermediate solutions," she said. "We cannot
wait for the perfect solution before we start reforms."
One such intermediate solution would be to return to a band on
the rupiah's fluctuations or to have the rupiah pegged at 5,000
to the dollar if it is used to import food and medicine. (08/rid)