Indonesian lawmakers slam IMF for holding out on funds

Regional Economic CRUNCH

INDONESIAN legislators yesterday lashed out at the International Monetary Fund (IMF) for its decision to delay disbursement of aid money, saying that it could push the country deeper into economic malaise.

While many were in favour of the IMF-sponsored reforms to rescue the economy, the legislators also felt that Indonesia could do without aid if it wanted to dictate terms to Jakarta.

“We don’t want to go down on our knees and beg for help,” said Golkar party executive Professor Mubyarto, who is also the Assistant Minister of Poverty Eradication at the National Development Planning Board.

“We survived much more difficult conditions 30 years ago and we will do so again without anyone telling us how to run the country.”

He told The Straits Times that the IMF’s 50-point reform measures were “unreasonable” because the international body wanted them implemented quickly and without consideration of local factors.

His view was shared by other legislators now attending a 11-day session of the People’s Consultative Assembly (MPR) to elect new leaders and provide the incoming government with policy guidelines.

Mr Jusuf Syakir, leader of the Muslim-based United Development Party faction in the country’s top policy-making body, said the delay in the disbursement of the funds was aimed at “punishing” Indonesia for not implementing reforms.

“We believe that they want to see changes before giving us the money,” he said.

“We want some of the terms revised because they are not practical.”

Most legislators across the five MPR factions felt that it was hard to dismantle monopolies like the National Logistic Agency (Bulog), which keeps stocks of essential commodities such as rice.

Prof Mubyarto said the agency could not be abolished because the government had to guarantee supplies of staple food items and not leave it to market forces.

He said that a 100-per-cent privatisation programme was “too idealistic”.

“The IMF has to realise that we cannot do it overnight and need more time.”

Another sore point, he said, was for the country to open itself up to foreign investment.

“How do we protect the local small- and medium-sized enterprises from the better-funded and equipped foreign firms?” he asked, adding that if the local outfits collapsed, it “could mean more problems for us”.

Mr Jusuf said that a delay could push “Indonesia further down the hole” because Jakarta needed funds for its subsidies and imports.

“This decision is counter-productive because we are eating into our already-limited foreign reserves for such payments,” he said.

He said there was a sense here that the IMF and “other foreign countries” were against Indonesia implementing a currency board system (CBS) to peg the battered rupiah against the US dollar.

“What they have to understand is that our immediate priority is to stabilise the rupiah, which has been fluctuating blindly for the last two months,” he said.

“We feel this is the best way to go. The government will implement the IMF reforms, but in tandem with the CBS.” sk,0

Lieutenant-General Hari Sabarno, faction leader of the Indonesian armed forces, also struck a nationalist chord.

He said that Indonesia would not succumb to the IMF’s “threats and pressures” to quicken the pace of reform.

“We are a sovereign country. We have our pride,” he said. “We don’t want strings attached to whatever help they give us.”

Golkar legislator Fahmi Alatas said that the IMF decision was not just bad news for Indonesia. He said: “The IMF cannot just punish one country and expect other countries in the region to be insulated from Indonesia’s problems.

“We will all suffer.”