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