Just say no to the IMF
Just say no to the IMF
From Neraca
The Indonesian government should take necessary quick and bold
corrective measures in the nation's economy following the failure
of the International Monetary Fund (IMF) to hit the target in its
economic salvation program. First, the IMF must be asked to take
responsibility for its incorrect predictions on the condition of
an Indonesian economy which has become increasingly chaotic.
The IMF's aid is not a grant and will be quite burdensome for
the next generation to repay. Besides, it has cost us a lot
throughout the process to realize the aid, not to mention the
salaries and entertainment fees to be paid for the IMF officials
who come to Indonesia in turns.
Second, bank interest rates should be reviewed. The professed
policy to raise the interest rate to restore public confidence
and prevent capital flight has, in fact, boomeranged on the
country's economy. Quite a number of companies, small and middle
scale, have gone bankrupt, which has resulted in a remarkable
increase in the unemployment rate.
The economic turmoil has apparently triggered social unrest,
looting, etc. It is understandable, because people need food but
prices of basic foodstuffs continue to go up. Worse still,
foreign investors are reluctant to invest here.
On the other hand, lured by high bank interest rates,
investors prefer to deposit their money in several Indonesian
banks. Their money is safe in the banks under the government's
guarantee. Many domestic businesspeople also prefer to live on
bank interest rather than investing their money in businesses, or
run enterprises which produce unguaranteed long-term yields for
profit.
Third, the government's bank recapitalization program should
be reviewed. Is it true that without this recapitalization the
national economy will stagnate? Or is it the IMF's "trial-and-
error" ploy? If this fails, the people will again have to pay the
price.
The IMF may not realize that the mentality and character of
bankers here are not as clean and unspoiled as those they usually
find out there. Many bankers here are at the same time owners of
real estate, or cement factories, or pulp factories, etc. They
tend to consider funds of their clients, including the small
depositors, to be theirs. They use the money to develop their
enterprises instead of maintaining their institutions' healthy
growth and hence supporting the economy.
Is it fair that people have to bear the burden for the
bankers' amoral and decayed aptitude? The government should be
prudent enough in providing its protection only to the most
appropriate banks.
Last but not least, the government should be wise and have the
guts to say no to the IMF's program, which will only aggravate
the woes of our ailing economy.
TAUFIK KARMADI
Jakarta