Soeharto lauded over reforms

JAKARTA (JP): U.S. President Bill Clinton has lauded President Soeharto's courage and determination to conduct sweeping economic reforms, a minister said yesterday.

In a telephone conversation Thursday evening (Jakarta time), Clinton congratulated Soeharto following the latter's signing of a letter of intent pledging to the International Monetary Fund (IMF) to carry out drastic economic deregulatory measures. The package includes a zero economic growth target for this fiscal year in an effort to salvage the country's battered economy.

"Clinton pointed out that what was important was the implementation of an agreement with the IMF. The President fully shares Clinton's view," Minister/State Secretary Moerdiono said yesterday.

The Clinton administration promised to provide a US$3 billion loan as part of the US$43 billion IMF rescue package to Indonesia.

Meanwhile, visiting chairman of the U.S. Export-Import Bank James Harmon said in Jakarta yesterday the bank would support the $4.4 billion loans to Indonesia now under consideration. Harmon met with Soeharto Thursday.

Soeharto telephoned Clinton Thursday to brief him about the details of his decision and his negotiations with IMF managing director Michel Camdessus and his deputy Stanley Fischer.

"The president (Clinton) welcomed his (Soeharto's) letter of intent signed with the IMF, and called it a very constructive step," White House spokesman Mike McCurry told reporters Thursday on board Air Force One.

Soeharto has agreed to scrap major monopolies, to eliminate the politically sensitive fuel and electricity subsidies, and to discontinue any privileges to the national car program run by his youngest son Hutomo Mandala Putra.

He also vowed to abolish any budgetary and extra-budgetary support and credit privileges to the state aircraft manufacturer, PT IPTN.

A White House statement described the reform package as Indonesia's best hope to restore economic growth.

"Indonesia's vigorous and sustained implementation of its reform commitments undertaken in conjunction with its IMF program offers the best prospects for restoring financial confidence," the statement said as reported by Reuters.

Clinton called Soeharto last week and said he was confident Indonesia would be able to heal its ailing economy under an IMF program.

Japanese Prime Minister Ryutaro Hashimoto, who pledged a $5 billion loan to Indonesia, also praised Soeharto's brave decision.

"I welcome the agreement. We hope it will help restore confidence in, and the stability of, the Indonesian economy," he was quoted by Kyodo as saying in Tokyo.

German Chancellor Helmut Kohl's special envoy Kohler told Soeharto yesterday that German businesses still regard Indonesia as a lucrative economic power.

"Germany and its businesspeople still think that Indonesia is a great country with a high potential," Kohler said after meeting with Soeharto at his private residence on Jl. Cendana, Central Jakarta.

Mahathir

Malaysian Prime Minister Mahathir Mohamad is expected to arrive this morning in Jakarta for a one day visit to discuss the currency turmoil in the region with President Soeharto, Moerdiono said yesterday.

Moerdiono said Mahathir would hold bilateral talks with Soeharto and would immediately fly back to Kuala Lumpur after the meeting.

"Of course, they will discuss the current monetary crisis in the region," said Moerdiono when asked about the two leaders' agenda.

"I am just going there to see him. We are going to have a discussion because we are neighbors," Mahathir said in Kuala Lumpur earlier this week.

Malaysia provided a $1 billion bilateral loan to Indonesia to help the country resolve its crisis.

Despite the country's strong currency fluctuation, Mahathir has repeatedly hinted that his country would not seek assistance from the IMF saying such a move would only expose Malaysia to economic colonization by foreigners.

"The problem is that if we resort to foreign borrowings, this means that our economy is weak and we need to depend on other people who could then exert pressure on us," Mahathir said in an interview last week with TV3 in Kuala Lumpur.

"The two leaders may also discuss Malaysia's plan to expel foreign workers there to reduce the country's burden," a palace official said yesterday.

Hundreds of thousands of Indonesians are currently working in Malaysia, mostly in construction and the oil palm plantation sector. (prb)

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