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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Rational who wrote (626)	1/9/1998 3:55:00 AM
From: Esvida	Read Replies (1) \| Respond to of 9980

Sankar, It's probably a wishful thought by someone at that site. WSJ on Fri has an article about Indonesia. It says that the IMF is standing its ground. Here's an excerpt: January 9, 1998 IMF Warns Indonesians: Meet Goals or No Deal By BOB DAVIS Staff Reporter of THE WALL STREET JOURNAL WASHINGTON -- Struggling to keep its Asian rescue plans on track, the International Monetary Fund is sending different messages to Indonesia and Thailand. IMF officials said they believe that Indonesia hasn't made a good-faith effort to institute the economic changes pledged under a $43 billion bailout plan and warned they may cut off Jakarta from further loans. To underscore their concern, the fund will send an IMF economic team Friday followed on Sunday by Deputy Managing Director Stanley Fischer and soon afterward by Managing Director Michel Camdessus. The IMF said it "believes the recent depreciation of the rupiah represents a significant overreaction by the market," but its top executives are sure to tell Indonesian officials that they need to follow the IMF's prescription to reverse the market debacle. "You can tell when things are going off track," said an IMF official. "That's the point where you have to get very serious." .... deleted about Thailand .... With Indonesia, the fund's delegates Thursday debated the Indonesian situation during a long meeting in which they were expected to approve another $2 billion in loans for South Korea. Additionally, the IMF is reviewing Indonesia's most recent budget, which calls for stepped-up spending rather than IMF-mandated austerity, and has sent a letter outlining its concern to the Indonesian government. The IMF already has made available $3 billion to Indonesia, and is scheduled to disburse another $3 billion by March 15. An IMF team will fly to Jakarta later this month or early next month to review the program-and to press Indonesian financial authorities to make the necessary changes. Complaints Are Specified Along with the budget, IMF officials say Jakarta has gone ahead with needless infrastructure projects and hasn't lived up to its word to close 16 banks. One of the banks was owned by President Suharto's son, who criticized the IMF requirement and then opened a new bank on the site of the shuttered one. .... deleted about Thai and Russia to the end of the article .... Sorry for the deletions. I feel a bit queasy posting this article w/o authorization. By deleting, I hope WSJ will not go after me since a partial post may serve as a teaser for more people to subscribe. -Al

To: Rational who wrote (626)	1/9/1998 6:38:00 AM
From: Jack Clarke	Respond to of 9980

Sankar, Free markets, anyone? >>TOKYO, Jan 9 (Reuters) - Japan has called for the setting up of an international body aimed at stabilising investment and credit to prevent outflows of capital from developing countries hit by financial crisis, Kyodo news agency quoted an international monetary source as saying on Friday. The source said that Vice Finance Minister for International Affairs Eisuke Sakakibara proposed the creation of the body in a meeting with U.S. Deputy Treasury Secretary Lawrence Summers and International Monetary Fund (IMF) managing director Michael Camdessus in Washington, Kyodo reported. The source was quoted as saying Summers and Camdessus ''did not respond clearly but showed interest'' as private-capital outflows have aggravated the current Asian economic turmoil. The body would offer insurance on loans extended to developing nations through financial institutions in developed countries. The source added that Japan intended to make the proposal at a meeting of Group of Seven (G7) industrialised nations next month and in April, Kyodo reported. Reminds me of the Government official (?Maylasia) who wanted to make it a crime to short the currency. Do these anti-free market measures suggest desperation? What do you think it means, if anything? Thanks, Jack