New Indonesian Economic Minister: Less IMF, More World Bank
Copyright 2000, World Bank Development News
August 24, 2000
Indonesia's newly appointed economic tsar, Rizal Ramli, yesterday pledged an "aggressive and pro-active" approach to speeding up recovery of the country's economy, with less reliance on the IMF, reports Agence France-Presse. "This year will be the year of the rebirth of our economy," the Boston-trained academic said two hours after being named coordinating minister for the economy.
But Ramli, who is known to be close to President Abdurrahman Wahid, sent a clear signal that he wanted to reduce Jakarta's dependence on the IMF. "I'm convinced that IMF management is open to criticism. Our point is the IMF is indeed experienced in monetary and macroeconomic field," he said. "But for sectoral fields we would like the World Bank and the ADB to play a more important role."
Ramli has in the past called for a re-evaluation of Indonesia's relationship with the IMF, notes the story, charging that the international lender has failed to bring any improvement to Indonesia's economy. Jakarta needed to cooperate with all multilateral institutions-including the IMF-but said the institutions had to respect Indonesia's sovereignty.
In his view, Ramli added, the World Bank and the ADB took a more medium-term perspective in their approach to economic development, whereas the IMF was more focussed on the short-term.
The Indonesian rupiah dropped sharply after the announcement of the new cabinet lineup, which most forex dealers said they saw as a "crony" cabinet, notes the story. But Ramli shrugged off the rupiah's fall on foreign markets, and claimed any market negativity would be short-lived.
"As soon as our team starts working, I am convinced these temporary (market) outlooks will change as we show our pro-active and aggressive performance," Ramli said. The new economics team, which includes former bank restructuring agency (IBRA) chairman Cacuk Sudariyanto as the new economic restructuring minister and former banker Priyadi Praptosuharjo as the new finance minister, would "be more cohesive and consistent in restoring the economy," he said, adding that the top priority would be to create stability in the battered financial sector.
Ramli promised to restructure the corporate sector to stop "a repeat bleeding" of the banking sector, vowed to accelerate privatization, speed up the sale of assets held by IBRA, and boost small and medium-scale enterprises. He said he also planned to complete the recapitilization of the banking sector, which was devastated by the Asian financial crisis, and improve the volume of infrastructure projects at the village level. The New York Times (p. A10) also reports on the unveiling of Indonesia's new cabinet. Dow Jones also reports.
Separately, Reuters also reports the Asia Pulse said the IMF reaffirmed its commitment to lending helping hand for crisis hit Indonesia and cooperate with the new cabinet.
Separately, USA Today (p. 10A) and the New York Times (p. A10) report a Jakarta judge said today that the trial for President Suharto on corruption charges would start on August 31 and that the ex-dictator must appear in court.