Koehler to meet Gus Dur on Monday

JAKARTA (JP): Newly appointed International Monetary Fund (IMF) managing director Horst Koehler is scheduled to meet President Abdurrahman Wahid (Gus Dur) on Monday morning during his one-day visit here to discuss the country's ongoing economic reform program, according to a source at the fund.

The source said that Koehler would hold a news conference at noon at the Grand Hyatt Hotel in Central Jakarta.

Coordinating Minister for the Economy, Finance and Industry Kwik Kian Gie, and Minister of Finance Bambang Sudibyo held a welcome dinner for Koehler on Sunday evening.

Koehler declined to provide comments upon his arrival at the hotel late on Sunday.

Asked if the IMF would support Indonesia's plans to impose some form of capital control, he said: "I will talk with everyone who's interested in it, but not tonight ... There will be a news conference tomorrow."

But Koehler was quoted by Reuters upon his arrival at the airport as saying that the issue of capital control would be discussed with the President at their meeting.

"I will discuss it with the President," said Koehler.

"The IMF supports Indonesia in making a strong recovery and reducing poverty, that's our objective," he added.

Koehler is visiting Jakarta as part of a five-nation Asian tour. He has visited China, Thailand and South Korea. He will leave for India after Jakarta before flying back to Washington.

Koehler, a German national, was appointed to the IMF's top post in March, replacing Michel Camdessus.

His visit to Jakarta was made after the IMF approved on Friday a US$372 million loan to help Indonesia finance its key economic reform program.

The loan is the second installment in a three-year $5 billion economic bailout package agreed between the newly appointed administration of Abdurrahman and the IMF in January.

The release brings the total disbursements to Indonesia to $715 million.

The second loan was supposed to be disbursed in April but was delayed due to dissatisfaction with the slow progress in the country's economic reform program.

Indonesia was hit by a financial crisis in the middle of 1997 which led to its worst economic crisis in three decades. The country first signed an economic reform package with the IMF in November 1997. The fund had organized a $10 billion bailout package.

Koehler's visit to Jakarta comes amid reports that the government is considering imposing some form of capital control to help strengthen the ailing rupiah.

Koehler himself made a surprising comment last week in Bangkok that discussions about capital controls were not taboo.

Reports that the government was considering to implement some form of capital control helped strengthened the exchange rate of the rupiah against the U.S. dollar on Friday to close at Rp 8,385 per dollar compared to Rp 8,630 on Wednesday. But this was still far from the government's target of Rp 7,000 per dollar for this year.

The rupiah plunged to a seven-month low last month amid concern over domestic political infighting and security problems. (rei)