Rizal lashes out at IMF executive for 'lies'

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)