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)