Soeharto pledges IMF sweep economic reforms

Soeharto pledges IMF sweep economic reforms

The following is a letter accompanying the memorandum of
Indonesia's reinforced economic reform program signed in Jakarta
Thursday.

Mr. Michel Camdessus
Managing Director
International Monetary Fund
Washington, D.C. 20431

Dear Mr. Camdessus:

1. The attached Memorandum on Economic and Financial Policies
(MEFP) outlines the strengthened and much reinforced program that
Indonesia intends to implement over the next three years to
overcome its current economic difficulties. This comprehensive
policy package includes bold reforms to sweep away structural
rigidities, improve fiscal transparency, and restore the banking
system back to financial health. These reforms will be supported
by a prudent fiscal and monetary policy.

2. The policies described in the attached MEFP supplement and
revise those in the MEFP of Oct. 31, 1997. The specific
performance criteria relating to the monetary, fiscal, and
international reserves target will be set over the next few days,
and presented in annexes that will also be attached to this
letter.

3. We firmly believe that the policies set forth in the
attached MEFP will serve to quickly restore market confidence,
which has declined considerably over the past several months, and
enable the country to return to the path of rapid growth.
Nevertheless, we remain committed to taking any additional
measures that may be necessary for this purpose. During the
period of the proposed stand-by arrangement, Indonesia will
consult with the Managing Director of the Fund on the adoption of
any measure that may be appropriate, at the initiative of either
the Indonesian authorities or the Managing Director, in
accordance with the Fund's policies on such consultations. We
will also provide the Fund with such information that it requests
on the progress made in policy implementation and achievement of
program objectives.

4. In order to ensure that the economic objectives are
realized, I have decided to establish under my chairmanship a
high council in charge of overseeing the implementation of the
program. The Secretary General of this council will have full
responsibility and authority to ensure the timely implementation
of the reform measures agreed with the IMF, and will report
directly to the President. The work of the council will be
assisted by a high-level IMF advisor.

Sincerely yours,

Signed,

Soeharto