Indonesia calls on IMF

Wahid and his top economics minister Ramli (far right) have to convince IMF of economic reforms.

JAKARTA, Indonesia -- Indonesian President Abdurrahman Wahid has sent a top official to Washington to resolve a loan deadlock with the International Monetary Fund.

Indonesia's chief economics minister Rizal Ramli said on Tuesday before meeting IMF officials he was confident of reaching an agreement with the Fund over a stalled 400-million-dollar loan.

The IMF, which has propped up Indonesia's economy since the 1997 Asian crisis, delayed paying the loan in December because of disputes with Wahid's government about the pace of reforms.

The IMF has refused to hand over the money until Jakarta settles questions of regional government borrowing and central bank reform, and sells stakes in two retail banks.

Advisors urge compliance

Earlier on Tuesday, foreign advisers urged embattled Wahid to stick with the IMF program.

"We believe Indonesia is poised at a critical juncture. It must build on a year of promising but still highly fragile and incomplete economic recovery," the advisers said in a letter to Wahid made public on Tuesday.

"That effort would be surely jeopardised -- indeed made fruitless -- by failure to address certain issues, some chronic, some new," they added.

In response, Wahid said he would work to curb inefficiencies, and crack down on cronyism and corruption.

"To improve them all, we have to improve the existing laws, including the customs and taxation laws, as well as the government bureaucracy. We also have to improve the quality of judges. So many things have to be done," The Jakarta Post quoted him as saying.

Wahid has been under siege recently, as opposition parties back moves to impeach him for alleged corruption.

The IMF promised to provide 5 billion dollars in loans to Indonesia to finance a three-year economic reform program, but so far, it only disbursed around 1 billion dollars.

Last week, Rizal complained the IMF was pressing too hard, saying it was difficult to implement every reform while the country was going through its complex transition to democracy.

Industry and Trade Minister Luhut Panjaitan said last Friday the IMF should stop interfering in the small details of Indonesia's economic program.

The failure to reach a new agreement with the IMF may affect Indonesia's debt rescheduling program, and in turn, the state budget and economy.

Indonesia has already suffered a setback from its other key donor, the World Bank, which slashed its annual funding program from 1.2 billion dollars to 400 million dollars in January.

The Associated Press & Reuters contributed to this report.

International Monetary Fund
Indonesia Government

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