Indonesian economy to expand: Kwik

Indonesian economy to expand: Kwik

SINGAPORE (AFP): Indonesia's economy should expand two percent
next year after languishing in recession for two years, according
to IMF and government calculations, a top Indonesian minister
said Saturday.

Indonesian Coordinating Minister for the Economy, Finance and
Industry Kwik Kian Gie also said that details for the resumption
of frozen International Monetary Fund (IMF) aid to Indonesia
would be finalized by mid-December.

Kwik was speaking at a business leaders' forum here where
Indonesian President Abdurrahman Wahid explained his new
administration's economic policies to bring Indonesia out of a
financial and economic mess.

"Most probably, based on very accurate calculations by the
experts of the IMF, with deficit spending of around eight
percent ... economic growth of about two percent will be
achieved," he said.

Indonesia's economy contracted by a massive 13.2 percent in
1998, a year after the regional financial crisis erupted and
plunged most of Asia into recession.

Economists expect Indonesia to post growth of minus 1.0 to
minus 0.1 percent this year.

Kwik, who replaced Ginandjar Kartasasmita as Indonesia's
economic czar, said IMF Asia-Pacific director Hubert Neiss left
Indonesia late Friday after talks with government leaders on the
resumption of aid.

In September, the IMF, the World Bank and the Asian
Development Bank blocked about US$4.6 billion in loans after the
Bank Bali scandal erupted in July, implicating senior members of
the previous government.

Kwik said he expected a detailed schedule for IMF aid
resumption to be completed by December 15.

"In that sense full cooperation from the international
community can be reassured," he said.

According to reports Saturday, the IMF said its experts would
resume talks in Jakarta next week on Indonesia's economic plans,
including a detailed letter of intent listing the policies
Indonesia planned to adopt.

Indonesia received an international rescue package worth more
than $45 billion in 1997, but lending was halted earlier this
year because of the Bank Bali scandal.