Megawati defends govt in state of nation speech

Fighting to retain her presidency, Indonesian leader insists she has brought stability to the economy.

President Megawati Sukarnoputri, bracing herself for a tough election battle next month, yesterday came out in defence of her administration as she spelled out its accomplishments over the past three years.

In the annual state of the nation address, she said that despite creeping shortcomings in fighting corruption, her government had stabilised the economy to attract much-needed foreign investment.

It had also cracked down hard on terrorists and separatists, she said.

But clearly, the focus of her message was on the economy which, since the 1998 financial crisis, has seen the Indonesian rupiah plummet drastically, pushing inflation rates up and causing millions to become jobless.

Her government had worked to implement policies to redress these problems, she said.

She noted: ‘With all our energy and efforts, we were able to finally resolve all sorts of difficulties stemming from the widespread monetary crisis which had almost paralysed our society and economy.’

During the speech, the 57-year-old leader could not resist taking a swipe at the International Monetary Fund (IMF) over its policies for Indonesia.

Despite coordinating a US$5-billion (S$8.6-billion) aid package for Jakarta during the Asian crisis of 1997-98, she claimed the IMF’s policies had failed to alleviate the country’s financial problems, leaving it trailing behind most of its regional neighbours.

Ms Megawati said: ‘A mere admission of mistake is actually not enough because, until now, we still have to bear the consequences of that mistake in recommendation.

‘So far, we have listened to their suggestions and recommendations and it is now time for them to also listen to our fair and justified complaints and do something to maintain and rehabilitate their reputation in our eyes.’

She said that the IMF should begin rescheduling repayments of Indonesia’s offshore debt to free up funds for developing the country.

The economy will have a critical influence on how Indonesian voters cast their ballots in the Sept 20 presidential run-off.

Recognising the importance of sweetening the ground, Ms Megawati’s speech projected that economic growth would accelerate to a targeted 4.8 per cent this year, with inflation still at manageable levels of around 7 per cent.

She projected 5.4 per cent growth for next year.

Despite her success in restoring economic stability, criticisms abound over her government’s lacklustre approach in tackling corruption – a fact she publicly acknowledged yesterday.

Ms Megawati also took pains to stress that her achievements went beyond the economic sphere.

On combating terrorism, for example, she said that the national police had managed to dismantle militant networks and capture several of those involved in attacks in Indonesia.

Her election advisers told The Straits Times that she was keen to impress on Indonesian voters her track record in power.

A senior source in her Indonesian Democratic Party – Struggle said: ‘She is very low key by nature. But now she realises that she has to profile her achievements a lot more so that people know what she can do for the country.’

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