Soeharto reassures Summers, Goh on reforms

Soeharto reassures Summers, Goh on reforms

JAKARTA (JP): U.S. Deputy Treasury Secretary Lawrence Summers
conveyed a message from President Bill Clinton to President
Soeharto yesterday on the importance of pursuing economic reforms
to restore confidence in the country's battered economy.

Summers said after a 90-minute talk with Soeharto that the
Indonesian leader had made it clear he was strongly committed to
the reforms tied to the International Monetary Fund (IMF)-
arranged US$43 billion bailout package.

"It's clear that President Soeharto recognizes the need to
take strong steps of the kinds that have been under discussion
with the IMF to create confidence and to build on the very strong
foundation for prosperity that Indonesia enjoys," Summers said
after meeting with Soeharto at his residence on Jl. Cendana,
Central Jakarta.

During the meeting, Soeharto was accompanied by government
economic advisor Widjojo Nitisastro and Minister/State Secretary
Moerdiono.

Summers was joined by Assistant State Secretary for East Asian
and Pacific Affairs Stanley Roth and Ambassador to Indonesia
Stapleton Roy.

Summers, sent by Clinton to Asia last week after the region's
financial crisis worsened, said his meeting with Soeharto had
been "very good".

Summers refused to take any questions from journalists.

Moerdiono said a message sent by Clinton to Soeharto was in
line with the government's plan.

"In short, we will see how quickly we can revive confidence in
the rupiah and carry out the reform and restructuring program,"
Moerdiono said.

Besides Soeharto, Summers also met with Minister of Finance
Mar'ie Muhammad and Minister of Industry and Trade Tunky
Ariwibowo at the Ministry of Finance, where about 30
demonstrators from the Communications Forum for Islamic Students
in Jakarta staged a protest over IMF's presence in Indonesia.

Summers left the ministry from the back door to avoid the
demonstration and refused to answer reporters' questions.

"Of course we talked about the importance of restoring
confidence in the economy ... but he did not make any conditions.
He understood my point and agreed with what I said," Tunky said.

He said he explained to Summers about the problems Indonesia
was facing and the government's efforts to improve the
competitiveness of the country's economy.

"We must remove barriers, reduce costs and implement measures
to make the economy more competitive," Tunky said.

Indonesia has become the focal point of IMF and U.S. concerns
after the rupiah crashed last week to over 10,000, a fall of over
70 percent since July, on concerns that the government might
backslide on its commitment to reform measures.

The slide was halted Monday after IMF first deputy managing
director Stanley Fischer said Soeharto appeared committed to the
reforms.

"The development of talks between the IMF and Indonesia is
positive, very positive," Mar'ie said after meeting with Summers.

"There is no fundamental difference between us and the IMF in
implementing the program," he said.

Mar'ie also indicated the government might make some
adjustments to its much-criticized draft state budget for fiscal
1998/1999, which starts April 1.

"There may be things which have to be adjusted, based on
recent developments," he said without elaborating.

Meanwhile, the Indonesian Chamber of Commerce and Industry
yesterday urged the government to immediately announce in great
details a new package of concrete measures to restore confidence
in the prospects of the economy.

In a meeting with Bank Indonesia's officials, the chamber's
chairman Aburizal Bakrie said that the government should
cooperate with the private sector to regain the confidence of
fund managers, investors and commercial banks in the prospects of
the economy.

Late last night, President Soeharto also held an hour long
discussion with Singapore Prime Minister Goh Chok Tong who is
here to personally discuss the crisis.

"I was very reassured by the President's determination to
solve the problems and to follow the IMF measures. The President
will abide by the IMF measures," Goh said after meeting Soeharto
at his residence on Jl. Cendana, Central Jakarta.

Singapore provided a $5 billion bilateral loan to Indonesia in
October to support the IMF's program to solve the economic
crisis.

Goh refused to comment on whether Singapore would inject more
funds to help strengthen the rupiah. "I think it is a very
sensitive issue, I am not going to comment."

Palace officials said last night that Soeharto was scheduled
to meet again with IMF Deputy Managing Director Stanley Fischer
for further consultations.

Minister/State Secretary Moerdiono said Malaysian PM Mahathir
Mohamad was scheduled to meet with Soeharto on Tuesday, also to
discuss the crisis. (prb/jea/rid/das)