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)