RI urged to take concrete steps to raise confidence

RI urged to take concrete steps to raise confidence

WASHINGTON (Reuters): Indonesia must take "constructive steps"
to increase confidence and promote stability, U.S. Deputy
Treasury Secretary Lawrence Summers said yesterday.

Summers told reporters after a seminar on Asia's economic
problems that Indonesia's economic recovery was important for the
Group of Seven industrialized countries and others.

"It is obviously very important that Indonesia take the kind
of constructive steps that increase confidence in Indonesia and
promote stability," he said.

"There is no question that the G-7 countries...want to see
Indonesia succeed. That success has to be based on measures that
can support sustained and sustainable growth."

Asked if he supported Australian led efforts to soften the
terms of a reform program agreed between Indonesia and the
International Monetary Fund, he noted that the IMF had always
been ready to modify its programs when needed.

He added: "It serves no one to support policies that do not
have a substantial prospect of restoring confidence."

An IMF team is currently in Indonesia to discuss what needs to
be done in order to secure the release of a new $3 billion
installment of the IMF's $10 billion loan to Indonesia. The loan
forms part of a $40 billion international rescue deal.

Meanwhile, Australian Foreign Minister Alexander Downer said
here Thursday progress was being made in talks to settle
difference between Indonesia and the International Monetary Fund.

"They're certainly headed in the right direction. I feel quite
positive," he told reporters after meetings with IMF and U.S.
Treasury officials about the situation in Indonesia.

Australia has been urging more sensitivity to the social
impact of economic reforms prescribed by the IMF. Downer said the
IMF package should be flexible because conditions in Indonesia
have changed.

"There is a wide measure of agreement between us and the IMF
on this question of a package, which is both going to help
restore confidence in the markets, and secondly, that is going to
take into account the social fabric of Indonesia," he said.

Downer said Australia wanted to coordinate an international
response to any food shortages in Indonesia, and that he found
Washington keen to participate.

"We have been discussing the issue of food security in
Indonesia and the extent to which there is a need for additional
support for the people," he said. "We would like to see a
coordinated international approach to that."

Downer would not say how much money Australia and other
nations might contribute to the food program. He said he would
discuss the issue with World Bank president James Wolfensohn
before leaving Washington.