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.