U.S. Democrats blast IMF over Indonesia

U.S. Democrats blast IMF over Indonesia

WASHINGTON (Reuters): Congressional Democrats dealt a blow to
President Bill Clinton on Friday by threatening to withdraw their
support for the IMF over loans to Indonesia and the agency's push
to open capital markets around the globe.

The International Monetary Fund is expected on Monday to
restart bailout payments to Indonesia despite fierce criticism
from U.S. politicians, who say the IMF should link its loans to
improvements in human rights and labor laws.

"It's a mistake. It clearly puts in jeopardy Democratic
support" for the Clinton administration's $18 billion package for
the IMF, Massachusetts Rep. Barney Frank, a senior Democrat on
the House Banking Committee, told Reuters.

House Democratic Leader Richard Gephardt of Missouri,
Democratic Whip David Bonior of Michigan, California Rep. Nancy
Pelosi and Frank also threatened on Friday to oppose IMF funding
because of a plan by IMF member countries to amend its charter to
make the liberalization of capital movements one of the fund's
chief goals.

The U.S. State Department on Tuesday expressed concern about
the reported abduction and torture of an opposition activist in
Indonesia and spokesman James Foley said Washington was concerned
about numerous other cases of people, many of them opposition
activists, who allegedly have disappeared.

Over objections from lawmakers, the IMF is set to approve a $1
billion loan payment to Indonesia next Monday, and to disburse a
further $2 billion in June and July from a $40 billion
international rescue package.

Frank said the IMF should withhold the money because Jakarta
has yet to prove that it is committed to reform.

"I think it (the loan payment) sends exactly the wrong message
to the Indonesian government and the opposition in Indonesia,"
Frank said.

"They (the IMF and the Clinton administration) better hope
that Indonesia responds after getting this money. If they give
them the billion and get no response, they're going to lose
(support from) me and many others," Frank said.