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