IMF upbeat on RI economy

IMF upbeat on RI economy

TOKYO (Dow Jones): The managing director of the International Monetary Fund Horst Koehler expects the Indonesian economy to exceed the IMF's growth forecast and expand by 4.5 percent through 2000, the president of Indonesia said on Thursday at a seminar in Tokyo.

"Mr. Koehler said we could exceed our current estimate of economic growth. He told me 3 percent-4 percent is not enough, and thinks as much as 4.5 percent is possible this year," said Abdurrahman Wahid in reference to a meeting with the new IMF chief in Jakarta on Monday.

The IMF currently estimates that the Indonesian economy will grow about 4 percent or slightly more during 2000.

Turning to the Indonesian government's own forecast, Abdurrahman, more popularly called Gus Dur, said a 5 percent rate of expansion in 2000 is attainable.

"If we are lucky we could reach 5.5 percent," Gus Dur said, "but I think that's too risky to believe."

Gus Dur conceded that one of the factors blocking economic expansion was political unrest which has led to many foreign investors withdrawing funds from Indonesia.

In response, the government plans to present an "economic framework" to investors "after August," he said.

At the same time, however, the Indonesian President expressed hopes that the Indonesian economy could evolve to become more self-sustainable and less dependent on overseas capital.

"We must change our tactical goals so that we are not relying on foreign investment as such, but export more," he said. "We are exporting more now and that is alleviating the unemployment situation."

Gus Dur said he is looking forward to holding bilateral talks with Australian Prime Minister John Howard to help further political stability within the region and to discuss the issue of East Timor.

Such talks might include a visit to Australia in the near future, he said. "I will do that in a short time despite the fact that many people (within Indonesia) object to a visit to Australia."

Gus Dur didn't mention, however, whether he will meet Howard in Tokyo although both leaders are in Japan for the funeral of former Japanese prime minister Keizo Obuchi later Thursday.