Kwik Kian Gie prioritizes IMF relations

Kwik Kian Gie prioritizes IMF relations

JAKARTA (JP): Newly appointed Coordinating Minister for
Economy, Finance and Industry Kwik Kian Gie said on Tuesday that
mending relations with the International Monetary Fund and other
international donors would be his top priority to help the
country overcome the economic crisis.

"What's now important is how to continue again the cooperation
with the IMF which was broken off," Kwik told The Jakarta Post by
telephone after Vice President Megawati Soekarnoputri announced
the new Cabinet team.

Kwik said that he had yet to propose a meeting with IMF
representatives, adding that he would consult with former
economic chief Ginandjar Kartasasmita, who had established a good
relationship with the fund and other donors.

The IMF is organizing a multibillion dollar bailout to help
finance the country's economic recovery programs. The fund and
the World Bank suspended loan disbursements to the country in the
wake of the East Timor problem and the Bank Bali scandal.

The IMF has demanded the government publish the full
PricewaterhouseCoopers (PwC) audit report on the high profile
bank scandal and to resolve the matter satisfactorily as a
prerequisite for the resumption of loans.

The previous administration of B.J. Habibie declined to comply
with the IMF demands.

The Bank Bali scandal centers around the "illegal" transfer of
some US$80 billion from the bank to a private firm linked to
Habibie's inner circle.

The Supreme Court ordered the Supreme Audit Agency last week
to hand over the PwC report to the House of Representatives.

House Speaker Akbar Tanjung said on Monday that two
commissions had been assigned to study the legal and political
implications of publishing the PwC report.

Kwik said that since the PwC report was now in the hands of
the House, it should be made public.

He said the full report should be made available to the media,
the IMF and the World Bank.

Kwik said earlier in the year that adopting the fixed exchange
rate could strengthen and stabilize the rupiah at Rp 5,000 per
U.S. dollar, a level which he said could help the private sector
repay their overseas debts.

However, Kwik said on Monday that the move was not viable.

"During a meeting between the IMF and the Indonesian
Democratic Party of Struggle (PDI Perjuangan) it was concluded
that implementing a fixed exchange rate was risky because of the
lack of forex reserves," he said.

Kwik is a deputy chairman of Megawati's Indonesian Democratic
Party of Struggle (PDI Perjuangan), which won the June general
election.

Kwik is the only ethnic Chinese member in the new Cabinet
team.

Some analysts said that the appointment of Kwik could help
encourage the return of billions of dollars parked overseas by
Indonesian business people, mostly ethnic Chinese, following the
mass unrest and deepening economic crisis last year. Ethnic
Chinese were often targeted during riots.

The return of the money is considered a crucial factor in
helping the economy to recover.

But Kwik said the government would not appeal to business
people to bring their funds home, because it would return by
itself if the business environment in the country was conducive,
which included social and political stability.

"The funds will return home if the government doesn't do
absurd things ... Indonesia has great potential, including in
terms of market and natural resources," he said. (rei)