Indonesia vows to pursue painful economic reforms

Indonesia vows to pursue painful economic reforms

WASHINGTON (AFP): Indonesia's finance minister pledged to world leaders Tuesday that his government would stick with painful economic reforms despite widespread suffering caused by the Asian financial crisis.

"Let me reaffirm the strong commitment of my government to continue reforms," Finance Minister Bambang Subianto said in a speech at year-end meetings of the World Bank and International Monetary Fund (IMF).

Forecasting the depth and breadth of the financial crisis that began in Thailand 15 months ago would have been impossible, he said.

"While a measure of financial stability has been restored in some Asian countries, recovery is not in sight yet," he said, adding that the "ripple has reached into far corners of the world."

"For Indonesia the crisis has brought more than adverse economic consequences," he said, alluding to the millions of Indonesians pushed into poverty in the last year.

Enumerating elements of Indonesia's reform program -- such as streamlining tax laws and increasing transparency -- Bambang several times thanked the international community for aiding Indonesia.

The IMF arranged a multi-billion-dollar bailout for Jakarta as its problems worsened last year.

But the downward spiral continued, and austerity measures fueled riots that brought down President Soeharto after more than three decades in power.

On Monday, Indonesia reported that its gross domestic product shrank dramatically and consumer prices soared in the first nine months of the year.

GDP contracted 13.59 percent in the nine months to September while inflation topped 75 percent, the country's top statistician said.

For the whole of 1998, the economy is expected to shrink by 13.7 percent, according the head of the central Statistics Bureau, Sugito.

The forecast was just short of the 15 percent contraction predicted by the IMF for Indonesia's battered economy. Last year, the economy grew 4.6 percent.