IMF: We're not walking out of Indonesia
IMF: We're not walking out of Indonesia
SINGAPORE (AP): The International Monetary Fund has not "walked out of Indonesia" despite the IMF's stalled payments on a loan to the country, a senior official from the fund said Friday.
However, the IMF was "anxious" to complete a review of Indonesia's economic performance, IMF First Deputy Managing Director Stanley Fischer said.
"We have made it clear - and there are continuing discussions with the government - that there are changes that we see are needed in order to complete the next review," Fischer told business people at a forum in Singapore.
Fisher said the review "should have been done several months ago."
The review could open the way for the IMF to hand Indonesia a US$400 million loan, which has been delayed since late last year. The IMF stopped payment of the loan because it was worried that Jakarta would not implement economic reforms.
Fischer said he was "moderately hopeful" that economic reforms would go ahead before Indonesia's current political crisis is fully resolved.
On Wednesday, Indonesia's parliament called on the People's Consultative Assembly, the nation's highest legislative body, to convene a special session on Aug. 1 to impeach President Abdurrahman Wahid for alleged corruption and incompetence.
Wahid is widely expected to be replaced by his deputy, Vice President Megawati Sukarnoputri. But Wahid's supporters have been rioting and threaten more violence if he is forced out.
Despite the political turmoil, Fischer says Indonesia's economy is still strong and has potential to grow.
"I think the prospects are reasonably good that the Indonesian economy will recover, will return to growth - but it will take some resolution of the current political difficulties," said Fischer.
Meanwhile, Bank Indonesia Deputy Governor Achjar Iljas on Friday said Indonesia's flagging rupiah currency is currently undervalued and can rise significantly if the country's crisis is resolved peacefully.
"I am confident that the rupiah can average 9,600 (to the U.S. dollar), provided there is a peaceful solution," Achjar said.
The rupiah was trading at 11,155 to the U.S. dollar early Friday.
"The rupiah is currently much undervalued because of the current political situation," Achjar said.
He was speaking to reporters on the sidelines of the 36th Conference of the Governors of Southeast Asian Central Banks, a closed-door meeting held in Singapore Friday and Saturday.
The two-day central bankers' meeting in Singapore comes amid renewed turmoil in Asian financial markets, with the currencies of Indonesia, the Philippines and Thailand losing ground because of domestic political instability and concerns over economic policies.