Is IMF's help necessary?

Is IMF's help necessary?

From Merdeka

My friends and I always keep ourselves abreast of social and
economic development in our beloved Indonesia. A number of basic
questions, which are also being asked by broad sections society,
regarding the government's policies in managing the monetary
crisis have arisen in discussions amongst ourselves and between
us and other social groups.

I intentionally raise these questions in the readers' letter
section in Merdeka in the hope that some experts or intellectuals
can come up with a correct and logical answer based on common
sense and morality. In essence, these questions can be summed up
as follows: Is it necessary for us to ask the IMF and the World
Bank for help?

As always stated by the governor of the Bank of Indonesia,
Indonesia keeps a considerably large foreign exchange reserve. In
July 1997, our foreign exchange reserve stood over US$21 billion,
an amount sufficient for 5.5 months of imports. In August, the
amount was over $20 billion and in October, we still have over
$20 billion in foreign exchange reserves (despite several bank
interventions). The amount would be $21 billion if the foreign
exchange reserves held by private banks were added to the public
reserve. This amount would be enough to finance five months of
imports.

In addition, the government still has a $2 billion stand-by
loan, which can be called on at any time. Now that Indonesia
holds such a large amount of foreign exchange reserves and can
call on its standy-by loan, is it really necessary for the
government to ask the IMF for help? Has the government lost its
confidence in the country's economic fundamentals, which have
always been touted as being very strong? This lessening self-
confidence was very clear when Mar'ie Muhammad, responding to IMF
praise heaped on Indonesia, openly said that IMF's appreciation
was necessary to help increase self-confidence (Merdeka, Oct.
11).

With such foreign reassurances sought after, one gets the
impression that our monetary authorities were in a panic when
they hastened to ask the IMF for assistance to cope with the
foreign currency crisis. Panic is the manifestation of excessive
anxiety about the likelihood of helplessness in facing the
future.

Why do we dare take the risk of IMF imposed measures while
observers estimate that the aid package for Indonesia would only
be about $4 billion to $6 billion? Aren't the nation's assets
large enough to bear a burden of that amount? Aren't there about
200-300 very wealthy business tycoons in Indonesia who could help
as well?

If these business magnates keep doing nothing and simply
assume an indifferent attitude, people might think that it would
be really necessary to review policies of private ownership of
business undertakings which affect the lives of so many people.
Are these policies in conformity with the spirit in Article 33 of
the 1945 Constitution?

These are the questions that keep teasing our conscience.

FAIZAL REMBAH

Jakarta