Ramli vows to maintain IMF program

JAKARTA (JP): Newly appointed Coordinating Minister for Economic Affairs Rizal Ramli pledged on Wednesday to continue the International Monetary Fund-sponsored economic reform program.

But Rizal said he would meet with the IMF and other multilateral institutions, including the World Bank and Asian Development Bank, to redefine their role in the country.

"Indonesia is a sovereign nation and we still need the cooperation of multilateral institutions and the support of other countries in the world to help recover our economy," he told a media conference at the headquarters of the State Logistics Agency (Bulog).

Rizal is currently head of the agency.

"But (the relationship) must be based on a respect of our sovereignty as a nation. I think the IMF management is open to criticism and inputs," Rizal said at the meeting, held immediately after the announcement of the new Cabinet lineup.

"I am a pragmatic person and am ready to negotiate and I also believe that Stanley Fischer (IMF's first deputy managing director) will be ready to (hold) discussions ... I believe that we'll reach a better agreement," he said.

"The IMF has experience in macroeconomic and monetary issues. This is their core competence. But for sectoral development, we would like to see the World Bank and Asian Development Bank take a greater role," he added.

The IMF has been criticized for being too deeply involved in the development of various economic sectors in the country, including agriculture.

"The World Bank has been too busy with good corporate governance issues. We want to see the Bank return to its main role, which is economic development," Rizal said.

Rizal has been a strong critic of the IMF-prescribed economic program.

The IMF agreed in January to provide President Abdurrahman Wahid's administration some US$5 billion in loans to help finance the country's three-year economic reform program.

The IMF has so far disbursed some $730 million in loans and is to disburse another $400 million later this month if, as is expected, the Fund's board of directors approves the letter of intent (LoI) prepared by the previous economic team.

Abdurrahman appointed Rizal on Wednesday replacing Kwik Kian Gie.

He is known as a close confidant of the President and previously chaired the Econit Advisory Group, a leading privately owned think tank.

The rupiah tumbled to around Rp 8,365 per U.S. dollar in late trading on Wednesday following the announcement of the new Cabinet.

But Rizal played down the weakening of the rupiah, saying it was temporary.

"If the economic team can later prove that it can work in harmony, the negative perception will disappear," Rizal said.

He also expressed confidence that the new economic ministers would form a solid team.

"I'm confident that this will be a solid team because I know them personally," he said.

The previous economic team was criticized for its poor performance and ineffectiveness.

Rizal said that the new economic team would start work on Monday. It is due to be sworn in on Saturday.

Asked about the fate of the Master of Settlement and Acquisition Agreement (MSAA), he said that he would continue the policy of his predecessor and wait for the results of the House of Representatives' special team.

The MSAA is an agreement signed by the previous administration of B.J. Habibie with several of the country's influential bank owners to repay their banks' debts to the government. Under the agreement, the former bank owners pledged various assets to repay their debts.

Kwik initially proposed to review the agreement, saying its implementation would cause the state to suffer huge losses because of the deteriorating value of the banks' assets. (rei/10)