Rizal lashes out at IMF executive for 'lies'

JAKARTA (JP): Coordinating Minister for the Economy Rizal Ramli lambasted International Monetary Fund (IMF) chief Indonesia representative John Dodsworth for what he termed as misleading, unprofessional and distorted remarks to the media about the government's stance regarding recommendations from the independent panel on amendments to the central bank law.

"Mr. Dodsworth stated that the government was not transparent regarding the panel's report and did not adopt many of the panel's recommendations. All of this is complete lies," Rizal told reporters on Friday.

He said the government had distributed 100 copies of the panel's report to the House of Representatives Working Committee on the amendments to the central bank law as soon as the House had returned from its recess in late April.

"Obviously, we could not make the document public before the House had received it. As you can see, the panel's report became a matter for public debate in the press as soon as it was delivered to the House. So what would have been the point of not being transparent, as Mr. Dodsworth has stated?" Rizal said.

"It is also not true that the government did not adopt many of the panel's recommendations. In fact, we have adopted almost all of them -- about 22 articles -- in the proposed amendments to the House," Rizal added.

He said "We sincerely want to maintain good rapport and good relations with the IMF as an institution. But its executive here should stop blackmailing the country. They should not play politics here."

The government agreed to set up the panel of foreign and Indonesian experts at the request of the IMF after this institution held up last December the disbursement of its third US$400 million loan tranche to the country, partly due to concerns over the amendment of the central bank law.

"That is entirely non-negotiable," Rizal added in reference to the panel's recommendation for dropping the proposed clause that requires the dismissal of the current Bank Indonesia board of governors immediately after the enactment of the new central bank law.

He recalled that he had also notified IMF first deputy managing director Stanley Fischer of the Indonesian "take-it-or- leave-it" stance during a recent meeting in Washington.

Rizal added he could not understand why the IMF so staunchly defended the present board of governors, while the Supreme Audit Agency had uncovered so many gross mistakes and wrongdoing committed by the board between 1998 and 2000.

The panel said in its report, "We believe this (clause on the dismissal) will be a serious mistake and will create the strong impression that, whenever Bank Indonesia became unpopular with the legislature or government, the law could be changed to dismiss the management.

"(This) will certainly not encourage confidence in the ability of the central bank to implement monetary policy free of political influence and will invite a negative and unhelpful reaction in the financial markets," the panel concluded.

According to Rizal, the IMF should also be held responsible for the predicament the government is now facing with the central bank.

"Why did the IMF allow the central bank to be politically independent without first cleaning up that institution?" he asked, in referring to the 1999 central bank law that provided that independence.

Rizal also pointed out that most of the alleged malfeasance or wrongdoing at the central bank that was uncovered by the Supreme Audit Agency took place when Bank Indonesia was under close IMF scrutiny (monitoring supervision). (vin)