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