RI remains committed to IMF programs

RI remains committed to IMF programs

JAKARTA (JP): Coordinating Minister for Economy, Finance and
Industry Ginandjar Kartasasmita said Saturday that Indonesia is
still committed to the IMF-sponsored reform program despite the
change in the government.

"The program itself is good and still valid. We need to
continue implementing it," Ginandjar told a media briefing at his
office.

He added, however, that general elections should be carried
out as soon as possible to set up a new government with a full
mandate from the people.

"We need to have a new government with a new mandate from the
people," he said, adding economic recovery can't be achieved if
the political situation does not corroborate.

"I'm prepared to be a minister for only one or two months," he
said, adding that he and the other economic ministers had no
ambition to hold the post until 2003.

Ginandjar said that due to the recent political turmoil in the
country, more emphasis would be given to the implementation of
social safety net programs to ease the economic hardships of low-
income people.

He said stabilizing the rupiah and controlling inflation would
remain the main priorities for the new government but the most
urgent measure would be put on how to prevent the country from
further deterioration caused by the escalating political tension
during the past couple of weeks.

"We still think the rupiah should be valued at Rp 6,000 to the
dollar," he said.

Indonesia's economy was turned into a crisis following a
plunge in the value of the rupiah in August. It is currently
being corrected with the IMF, which has a commitment to provide
US$43 billion in bailout funds.

Ginandjar was reappointed by the new President B.J. Habibie,
who succeeded former president Soeharto last week following
demands from students and opposition leaders for a total
political change in the country.

The other reappointed economic minister were State Minister
for the Empowerment of State Enterprises Tanri Abeng.

Bank Indonesia Governor Sjahril Sabirin retains his job but he
is no longer included in the cabinet's lineup as part of the
government's commitment to create a more independent central
bank. The next central governor will be appointed by the House of
Representatives.

Rahardi Ramelan, previously state minister for research and
technology, was named as minister of trade and industry,
replacing Mohamad "Bob" Hasan.

New faces were Finance Minister Bambang Subianto and Chairman
of the National Development Planning Board Boediono.

Ginandjar said the new economic ministerial team had won the
backing of the IMF and international community, including the
U.S. and Japan, because the new members were not new to them.

He pointed out that the two new faces, Bambang and Boediono,
had been actively involved in the negotiation process with the
IMF when designing the economic reform programs.

"I've just talked on the phone with the IMF, U.S. treasury
secretary Robert Rubin and the Japanese finance minister. They
give their full support," he said, adding that the IMF's Asia-
Pacific director, Hubert Neiss, was expected to arrive in Jakarta
tomorrow to make a review of the current development.

He also said discussions between Indonesia's overseas private
sector debt team and foreign bank creditors would resume on June
21 in Frankfurt, and is expected to come up with a solution.

Indonesia's overseas private sector debt, totaling $64
billion, is one of the factors causing the rupiah's plunge.

Ginandjar said that international support was essential to
help rebuild confidence in the crisis-hit economy, especially in
the battered rupiah.

He said the economic team would continue to create a
transparent economy, including eradicating intransparency in the
operation of the state oil company PT Pertamina and the national
logistic agency (Bulog).

"But this cannot be done overnight," he said.

Bank Indonesia Governor Sjahril Sabirin said at the same media
conference that he would maintain the central bank's monetary
policy agreed to with the IMF, which promotes a tight liquidity
environment to help stabilize the rupiah and control inflation.
(rei)