Results of June elections key to recovery: Summers

Results of June elections key to recovery: Summers

JAKARTA (JP): U.S. Deputy Secretary of the Treasury Lawrence
Summers said here on Monday that results of the general election
in June and the progress of the economic reform plan are key to
Indonesia's economic recovery.

"The confidence of the international community in both the
private and public sectors attached to the conduct of the June
elections is a key factor in bringing about further confidence,
both domestic and foreign, in Indonesia's economic future,"
Summers said after meeting with President B.J. Habibie at Merdeka
Palace.

He cited the restructuring of the country's messy banking
sector, a solution to the private sector's mounting debt problem,
and the effective implementation of the bankruptcy law and the
social safety net program as the most crucial points to put
Indonesia's economy back on track.

During the meeting with the President, Summers was accompanied
by Coordinating Minister for Political and Security Affairs Gen.
(ret.) Feisal Tanjung and Minister of Finance Bambang Subianto.

Summers arrived in Jakarta from Singapore on Sunday as part of
his five-nation Asian tour to see how the region was coping with
the economic crisis. The other countries on the itinerary are
China, South Korea and Japan.

After Summers' visit, Habibie is scheduled to receive
Secretary of State Madeleine Albright next month.

"We note that there has been progress in recent months on a
number of issues relating to financial stability, though (it's)
essential to make better progress going forward," Summers
remarked on Indonesia's economic situation.

He also said the government's policies should be carried out
with integrity and without favoritism and should be backed up by
political changes.

However, Summers also praised the government for its
achievements in political reforms and said there was a great
opportunity to further entrench democracy and restore the
potential for rapid economic growth.

He said the trust in the future of Indonesia's economy would
also rely on the enforcement of the rule of law, upheld on an
equal and unselective basis.

"This means, above all, making sure that every Indonesian can
feel secure in their country, in their life, in their property
and in their future," the official said.

Summers declined to give an explicit reply when asked about
the U.S. readiness to back up Indonesia's request for about US$1
billion in additional loans from the International Monetary Fund
(IMF) on top of its $10 billion pledge.

"We agreed on the importance of Indonesia adopting programs
that the international financial institutions could support with
confidence, secure in the knowledge that resources would be well
used," he said.

The Palace did not issue any statement about the meeting.

However, when speaking at the 87th anniversary commemoration
of the Bumiputra 1912 Life Insurance firm, the President said his
government would not repeat the mistakes of the previous
government which gave too much attention to economic growth and
ignored issues of equality.

"The policy, as we all know, eventually just created
conglomerates," Habibie said. (prb)