MPR likely to recommend ending relations with IMF

MPR likely to recommend ending relations with IMF

Fitri Wulandari, The Jakarta Post, Jakarta

The People's Consultative Assembly (MPR) is likely to
recommend the government to cut ties with international donor
agencies, particularly the International Monetary Fund (IMF), by
2003.

"All factions have agreed that the government must review
relations with international donor agencies," Syamsul Balda of
the Reform Faction and a member of the drafting team at
Commission B of the MPR Annual Session, said on Wednesday.

Syamsul said that a review of relations with donor agencies
would include the possibility of ending ties with the IMF because
they decided that it had contributed to the country's economic
disasters.

The planned recommendation will be finalized during a plenary
session on Thursday.

Syamsul said his faction would also push for a termination of
ties with the IMF.

"We have been working with the IMF for years, and it has
caused us a lot of disadvantages and few benefits. The IMF
prescriptions were unsuitable for this country," Syamsul said.

The discussion on the IMF and other donor bodies was part of
the deliberations to draft an economic recovery decree, which was
still being discussed by Commission B. The commission's plenary
session is expected to approve the draft.

The recommendation to end the country's ties with the IMF also
received support from Commission C which is tasked with
discussing the progress report by the President and the state's
high institutions.

"We support the government moves to end dependence on the
IMF," said Paskah Suzetta, a Commission C member.

Last year, the government decided to extend its loan
commitment with the IMF until 2003. It was part of a US$5 billion
loan package to Indonesia. So far, the government has only been
issued $2.6 billion of the package, due mostly to weak compliance
with IMF reforms.

The Fund's reform prescriptions to lift the country's economy
center on cleaning up corruption and the restoration of the
private sector, including reforming the banking system, corporate
restructuring, privatizing state-owned enterprises (SOEs), as
well as intensifying reform efforts in the judicial system.

These prescriptions have not worked well for Indonesia. The
privatization of SOEs, for example, which it is hoped can raise
Rp 6.5 trillion for this year's state budget, has only managed to
secure Rp 2.15 trillion due to opposition from regions and
legislators over what they claim is the sale of state assets to
foreigners.

Both Syamsul and Paskah said that the commission would
encourage the government to immediately set up an exit policy in
anticipation of the endorsement of the recommendation.

"The government should prepare exit plans so as not to cause
monetary disturbances," Paskah said.

Elsewhere, Syamsul said that the drafting team had narrowed
its recommendation to accelerate economic recovery in the fiscal,
monetary and real sectors.

While refusing to give details on the draft, Syamsul said that
the draft was better than the initial one as it also included
recommendations to reduce poverty and unemployment.

Meanwhile, the Reform Faction, in its statement, on Wednesday
urged the government to focus on accelerating economic recovery
in tourism and agriculture, saying that both industries only
needed small investments to provide employment and yield results.