Why should we rely on IMF?

Despite calls for Indonesia to become self-reliant, the government has taken controversial steps. Finance Minister Boediono hinted that the government will extend its contract with the International Monetary Fund (IMF) in 2002.

Boediono argued that the IMF is needed to reschedule the government debts to the Paris Club of creditors. On the other hand, Bank Indonesia Governor Syahril Sabirin said the IMF is needed to help the national economic recovery program.

Actually, the IMF will be unnecessary if the government is able to negotiate with donor countries. And what about economic recovery? This is also still a questionmark. Since then president Soeharto invited the IMF in October 1997 on the advice of New Order economic founder, Widjojo Nitisastro, the economy has not shown a sign of improvement.

It seems that the IMF only adds to the country's foreign debt burden. The government debts soared to US$74.164 billion by August 2001 from $53.865 billion in 1997. The government debts from the disbursement of IMF loans in 1997 have become due. So it is not surprising if $5.05 billion of the 2001 state budget fund is used to repay the foreign debts.

Honestly speaking, the IMF has failed to restore the economy. It can no longer acts as a benchmark. The much-delayed disbursement of the IMF bailout loans to Indonesia some time ago received negative responses from the market and investors. Admittedly, the IMF is not the only cause. Also, the government has no clear concept of economic recovery and is not consistent in handling the economy.

The IMF's failure is apparently because the multilateral agency does not know the disease suffered by Indonesia.

-- Republika, Jakarta