Mar'ie upbeat on IMF payment

Mar'ie upbeat on IMF payment

JAKARTA (JP): Minister of Finance Mar'ie Muhammad has expressed optimism that the second disbursement from the US$43- billion rescue package arranged by IMF for Indonesia would be made on schedule.

"Any delay in the disbursement will have a negative effect on the process of confidence recovery. This will adversely affect not only Indonesia but also efforts to strengthen and stabilize currencies in Southeast Asia," Mar'ie said in a statement released yesterday.

"Moreover, such a negative impact is something not intended by the IMF nor the international community, especially those actively supporting the reform program," he added.

Mar'ie stressed the need for good cooperation between the government and the IMF, various international financial institutions and the wider international community.

Mar'ie said he deemed it necessary to issue the statement following news stories which left the impression that the International Monetary Fund might delay its second disbursement of $3 billion scheduled for March 15.

"Any differences of interpretation of the implementation of the IMF-brokered reform package of Jan. 15 will be resolved as quickly as possible so that the spirit of cooperation could be maintained," Mar'ie assured.

Mar'ie cited the experiences of several countries which indicated that in the early stage of any economic reform there might be different interpretations regarding some spects of the reforms, especially in Indonesian case where the package was quite comprehensive.

Leaders from developed countries, which have pledged contributions to the bailout funds, and IMF officials have expressed concern about whether President Soeharto will carry out the economic reforms he has promised to implement in exchange for the $43 billion bailout package.

U.S. condition

Meanwhile, Reuters reported from Washington that the Banking Committee of the U.S. House, in a last-minute amendment to legislation approving funding for the International Monetary Fund, said the United States should oppose further payments to Indonesia unless Jakarta meets the terms of an IMF reform plan.

"The U.S. Secretary of Treasury shall certify that the U.S. executive director will oppose further disbursements of IMF funds to Indonesia unless the Indonesian government complies with its IMF reform package," said the amendment, from Rep. Maxine Waters, a Democrat from California.

The bill, approved after seven hours of debate in, would allow $18 billion of U.S. funding for the IMF to go ahead. It must still be approved by the full house, go through the Senate and be signed into law by President Bill Clinton.

Meanwhile, a senior administration official acknowledged Thursday that the results of former Vice President Walter Mondale's mission to Jakarta were "certainly less than we had hoped for."

The official, who asked not to be identified, said: "We told the President (Soeharto) what was needed. They were tough talks but we received very little in feedback from him."

U.S. President Bill Clinton spoke Thursday with Mondale, who has returned to the United States after what one U.S. official described as "tough talks" with Indonesian President Soeharto in Jakarta early this week.

On Tuesday, Deputy U.S. Treasury Secretary Lawrence Summers said Washington would oppose further disbursements of the rescue funds for Indonesia unless the reforms were clearly back on track.

Meanwhile, the New York Times said Thursday a $40 billion rescue package for Indonesia could be suspended later this month because President Soeharto shows a pattern of evasions and half-measures on the economic reforms he agreed to six weeks ago.

"From cars to cloves to banks to plywood, the painful austerity measures Mr. Soeharto promised in return for the aid made brief appearances here. But many have disappeared again in a haze of missed deadlines, quick name changes and fiscal shuffling," the Times said in a front page article.

"Tax breaks for a national car were removed, only to reappear in a new form," the newspaper said, as quoted by Dow Jones.

"Now, cartels controlled by Mr. Soeharto's close friends in cloves and plywood seem to have been dismantled, only to rise again," the newspaper said, attributing the information to analysts.

The U.S. newspaper said banking reform appears to have been slowed by the financial interests of the country's elite. (vin)