Indonesia tells IMF to stay out of politics

Indonesia tells IMF to stay out of politics

AUCKLAND (Dow Jones): Indonesia's senior economics minister, Ginandjar Kartasasmita, said Thursday he is "most concerned" about the recent fall in the value of the rupiah.

But he said that market participants are "overreacting" to recent events in East Timor and that the rupiah will recover once the situation in the Indonesian province is resolved.

In an interview with Dow Jones Newswires, Ginandjar also said the International Monetary Fund and World Bank should ignore the situation in East Timor and "shouldn't get involved in politics. "The IMF and the World Bank have no business in East Timor," he said.

Ginandjar said he had just met with a Jakarta-based representative from the World Bank and had told him strongly that the World Bank and IMF should stay out of politics. Both institutions have said they are very concerned by the situation in East Timor and may withhold loans if it doesn't improve soon.

"I told them that they are not well informed," Ginandjar said. "They are setting the wrong precedent for the future.

"The instigators of this (move by the IMF and World Bank) are playing with fire," he said, but added that he didn't know who the instigators are.

"I'm not saying that the international community has no right to be concerned on the situation in East Timor, they have every right," he said. "But there is a forum for that, the forum is the United Nations, not the IMF and the World Bank."

Ginandjar said he didn't know whether an IMF mission scheduled for September will go ahead. "I didn't hear from them directly," he said.

But he added that if the economic recovery program currently underway under the auspices of the IMF and World Bank fails then it is the IMF that "should be seen as responsible for that."

"It would be a pity if all this (aid) comes to nothing," Indonesia's senior economics minister said.

On continuing rumors that Indonesian President B.J. Habibie will resign or be forced out, Ginandjar said, "there is not going to be any coup in Indonesia.

"A coup d'etat can only be undertaken by the military and our military have no history of coup d'etat," he reiterated. "The government is in full control."

Ginandjar said the rumors of the coup are feeding on themselves.

He also said that he had just spoken to government sources in Jakarta who said the situation in East Timor is improving.

"Things are improving there in Dili," he said. Although "you can't say it's already normal."

He said the government had been surprised by the level of violence in the province given that the vote for independence was so high. "We are so surprised that this whole thing happened."