Bernie, Thread,
One more time around the ballroom floor. This one should be entitled "Dances with Wolves". It is, however, a shorter string for Suharto.
The following reproduced for personal use only.
New Accord Between Indonesia, IMF Allots Funds as Goals Are Achieved
By DAVID WESSEL
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- A senior U.S. official said the agreement to be announced Wednesday by Indonesia and the International Monetary Fund has the "key ingredients that are necessary for Indonesian economic recovery."
The new pact ends a period of estrangement between the Indonesian government and the IMF, and should lead to a resumption of IMF money going to the struggling Asian nation. To ensure the government keeps its promises, the IMF money will flow gradually in relatively small allotments, and disbursements will continue only if Indonesia meets specified objectives. "What will be important in the period ahead is for Indonesia to carry out the many steps that are laid out in this program," the U.S. official said. He particularly praised the "process of monitoring" Indonesian compliance with the IMF conditions.
Although details haven't been made public -- and will be scrutinized to see how much ground the IMF gave in negotiating the pact -- the program includes five pillars: A monetary-policy approach that essentially calls for slowing the growth of money and credit and raising interest rates in the hopes of pushing up the ailing rupiah. A renewed bank-restructuring effort that will ease the pressure on the central bank to pump liquidity into the banking system, which has contributed to growth in credit that the IMF deems imprudent. A set of principles for restructuring Indonesian companies' heavy foreign-currency debt burden, and a plan to begin serious negotiating very soon. A government budget austerity program that allows for continued subsidies of food and energy to protect poor Indonesians and minimize social unrest. And a renewed commitment to dismantle the elements of "crony capitalism," such as monopolies granted to friends and family of Indonesian President Suharto. The Indonesian government promised some steps in this direction earlier, but then backed away from them. |
