U.S. greets IMF-RI pact with $1b trade finance

U.S. greets IMF-RI pact with $1b trade finance

WASHINGTON (Reuters): The United States on Friday welcomed
Indonesia's agreement with the International Monetary Fund (IMF),
offering US$1 billion in trade finance as an incentive for
President Soeharto to stick to reforms.

"I welcome the agreement between the government of Indonesia
and the International Monetary Fund on a revised Letter of
Intent," U.S. Treasury Secretary Robert Rubin said in a
statement.

"The key to its success is the Indonesian government's
implementation now and over the long term," Rubin added.

Citing the IMF agreement, the U.S. Export-Import Bank said it
was willing to provide up to $1 billion in short-term financing
to Jakarta. The short-term financing would help U.S. exporters do
business in Indonesia and help Indonesian firms buy U.S. goods.

The memorandum on economic reforms was Indonesia's third such
agreement with the IMF in less than six months. The 117-point
reform program, agreed after more than three weeks of talks with
the IMF, will overhaul the way business is done in Indonesia if
fully implemented.

Hoping to convince skeptics this will be done, the government
set target dates for implementing all key points. It promised a
new antimonopoly law by the end of the year, moves to set up a
bankruptcy law and a special bankruptcy court by April 22 and
regulations for winding up of companies, mergers and acquisitions
by the end of September.

"This agreement supports a comprehensive program designed to
restore financial stability and growth in Indonesia," Rubin said.
"The United States and the international community have a major
stake in seeing Indonesia succeed in its efforts."

Earlier on Friday, Rubin urged Jakarta to follow the examples
set by South Korea and Thailand, the other countries hard-hit by
the financial crisis.

"Korea and Thailand really have taken hold of reform and made
it their own," Rubin told reporters after meeting with
Philippines President Fidel Ramos in Washington.

"And while they obviously have enormous challenges to deal
with going forward, they really have made these programs their
own and that is what hopefully Indonesia will do," he said.

There have been doubts about Indonesia's commitment to reforms
since it dithered on the previous two agreements, signed in
exchange for a $40 billion IMF-led bailout. The IMF delayed a $3
billion payment last month because it was worried about the way
Indonesia was implementing the reforms.

After meeting with Ramos, Rubin said Indonesia's compliance
with the IMF program was not only important for Jakarta but for
the other countries in the region.

The Export-Import Bank, an independent U.S. government agency,
said it was "encouraged" by Indonesia's progress in addressing
the country's financing and banking problems.

Along with $1 billion in financing, Ex-Im Bank Chairman James
Harmon offered advice to Indonesian President Soeharto.

"I believe that the implementation of IMF reforms is essential
for Indonesia in its recovery program for the benefit of its
local economy," Harmon said in a statement.

"Ex-Im Bank has remained open to consider credit-worthy
business in Indonesia, and with proper structuring, is willing to
significantly increase short-term financing to provide a bridge
to long-term economic growth for U.S. exporters and the
Indonesian economy," he added.