Indonesia told not to sever relations with IMF

Indonesia told not to sever relations with IMF

JAKARTA (JP): President Abdurrahman Wahid's foreign economic
advisers urged the government on Saturday not to sever ties with
the International Monetary Fund (IMF) despite complaints that the
institution was pressing too hard for reform.

"We believe it is already a difficult process to have someone
looking over your shoulder all the time," Paul Volcker, former
U.S. Federal Reserve chairman, told a press conference after a
two-hour meeting with Abdurrahman and Indonesia's top economic
ministers at Bina Graha presidential office.

"But for the moment, Indonesia is in that situation where it
needs to nurture confidence ... and cooperation with
international institutions is an important factor in sustaining
and encouraging that kind of confidence," added Volcker.

Volcker earlier said that "the confidence afforded here in
Indonesia and in the international market is so fragile" and that
"the external environment may be less favorable currently because
of conditions in the U.S and elsewhere."

Nobuo Matsunaga, former Japanese ambassador to the United
States, shared Volcker's opinion.

"We find today that there is some kind of suspicion or concern
about the economic performance of this country, so in that in
this respect, the relations with the IMF and also with other
international institutions is extremely crucial and we certainly
hope that solutions can be worked out for that" Matsunaga said.

"Japan, as one of the most friendly countries to Indonesia,
would like to strongly encourage Indonesia to establish
good relations with the U.S., the IMF and other countries that
are vital to Indonesia's economy," he added.

The suspension of the latest disbursement of IMF's US$400
million loan over Jakarta's perceived foot-dragging on economic
reforms prompted angry comments from chief economics minister
Rizal Ramli earlier this week.

Rizal's charge that the Fund was bullying Jakarta and that
Jakarta knew best what was good for it, raised fears that the
government might be prepared to make a total break with the IMF.

Rizal is scheduled to travel to Washington next week for
meetings with IMF first deputy managing director Stanley Fischer
and new U.S. treasury secretary Paul O'Neill.

Also present on Saturday were Singapore's Senior Minister Lee
Kuan Yew and Ulrich Cartellieri, a former member of Germany's
central bank and now a member of the supervisory board of
Deutsche Bank.

Lee said that they had "a very frank exchange" with
Abdurrahman and Indonesia's top economic ministers, but he did
not comment on the content of talks.

"We have expressed our views in our own way, given our
different background and different perspectives of the same
problem, but we came to the similar conclusion about the basic
issues," Lee said.