Soeharto lauded over reforms

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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