Indonesia 'better off without IMF'

  • AseanPlus News
  • Friday, 28 Feb 2003

JAKARTA: Campaigns to end the role of the International Monetary Fund (IMF) in Indonesia intensified on Wednesday, after a group of 35 leading economists said the economy would fare better without the IMF. 

Rizal Ramli, former chief economic minister who leads the coalition, told reporters that once the IMF gets its hands off Indonesia, the economy would expand stronger and even return to pre-crisis levels of around 7% by 2005.  

“The sooner Indonesia parts with the IMF the better for the economy, as without the IMF means that we have the flexibility to do a lot of things,” Rizal said, adding that Indonesia hardly benefited from the presence of the IMF as most of its programmes had simply pushed the economy deeper into crisis.  

His remarks poured fuel on the prolonged debate over whether the country should extend its economic reform programme with the IMF when it expires by the end of the year.  

Signed in 1999, the programme allows the country to obtain around US$5bil (RM19bil) in loans in return for implementing a number of key economic reforms.  

The involvement of the IMF was meant to help Indonesia’s economy get back on track after the 1997 financial crisis.  

The IMF assistance has benefited the country, not only in terms of financial aid, but also in terms of gaining support from other foreign countries and institutions for debt relief purposes – such as the Paris Club and the London Club – whose judgments on Indonesia’s economy are always based on the IMF’s assessment.  

And since the cash-strapped country is still highly dependent on the foreign debt rescheduling facilities, many have raised the need for the government to extend the IMF’s role in the country. Currently, the country’s outstanding sovereign debt amounts to around US$74bil (RM281.2bil). – The Jakarta Post/ Asia News Network  

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