Asia Times: Megawati courts IMF


	June 20, 2001	atimes.com

Southeast Asia

Megawati courts IMF

JAKARTA - Indonesian Vice President Megawati Sukarnoputri has encouraged newly appointed Coordinating Minister for Economy Burhanuddin Abdullah to continue efforts to improve relations with the International Monetary Fund (IMF) so that the country's burden will not increase.

Speaking after a meeting with the vice president, Burhanuddin said she had emphasized the importance of increasing cooperation with the IMF and paying attention to its concerns. "According to the vice president, cooperation with the IMF was not only needed for the country but for all sides, including the IMF," he said.

Building a good relationship with the IMF would also help smooth the rescheduling of debts under the Paris Club totalling US$2.8 billion, he said. "So we keep discussing the Letter of Intent (LoI) because otherwise it will harm us and create a burden on the national budget," he said.

Burhanuddin said one of the hurdles in relations with the IMF was the question of amendments to the central bank law. He said the questions of revision of the 2001 budget and assets' securitization were no longer a hurdle.

Burhanuddin said Megawati had also asked him to liaise with the coordinating minister for political and security affairs because every policy taken in the field of economy had an implication on other fields.

Regarding the vice president's wish to separate economic from political matters, Burhanuddin said the idea was not something impossible to achieve. "We have seen how last year the economy continued to grow in spite of all the socio-political problems," he said.

Burhanuddin also confirmed a report that the IMF is not expected to send a team to Jakarta soon to resume talks on further assistance for the crisis-hit country.The IMF representative in Jakarta was quoted as saying on the weekend the fund has no intention of sending a team to Jakarta shortly to discuss progress made in the country's economic reform program.

Before his replacement last week, finance minister Prijadi Praptosuhardjo had said the IMF would send a team to Jakarta this week to review the implementation of LoI.

In another development, the European Union will simplify its general system of preferences (GSP), making it more accessible as a market for Indonesian products, a European Commission (EC) official said on Monday.

Fokio Fotiadis, director for Asia of the European Commission, was speaking at the opening of a two-day meeting set up to develop their bilateral relations.

Fotiadis, who is leading the EC delegation, said the EU was viewing Indonesia as a potential partner with whom it was keen to establish closer trade and investment relations. He said that despite the current political turmoil in the country, many European businessmen were eager to invest.

The EC was represented at the meeting by a 14-man delegation and Indonesia by a 77-strong group led by Makarim Wibisono, director general for foreign economic relations of the Foreign Ministry.

Wibisono said Indonesia needed to expand its market to the EU as economic growth in the United States and Japan had slowed down. The EU, with an economic growth rate of 2 to 3 percent, and strong solidity among its member countries, was a potential market for Indonesia's exports, outside the US and Japan, he said.

About allegations that Indonesia was dumping some of its products in the EU, Wibisono said these might be true because many Indonesian businessmen had limited information on export procedures to the region.

The forum is aimed at fostering bilateral relations as well as enhancing trade flows between Indonesia and Europe and assisting Indonesia through its ongoing crisis. In trade and investment, the forum will discuss issues relating to textile exports from Indonesia, trade standards, investment policies, and taxation.

Parallel to the meeting, a workshop on anti-dumping practices is being organized to provide more information to Indonesian officials, businessmen and law practitioners on policies, procedures and measures of the EC regarding dumping practices.

(Asia Pulse)

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