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)