Suharto seeks new terms for bailout U.S. sends envoy to back up IMF (Washington Times)

Washington Times, March 2, 1998

JAKARTA, Indonesia – President Suharto defied the international financial community yet again yesterday, calling for a renegotiation of his country’s bailout plan on the eve of talks with U.S. presidential envoy Walter Mondale.

Expressing his impatience with efforts by the International Monetary Fund to bandage his bleeding economy, Suharto said Western nations should adopt a new approach, which he dubbed “IMF-Plus.”

The demand, likely to infuriate Washington and the IMF, came as the 76-year-old leader opened a special parliamentary session that will elect him to a seventh five-year term.

Mr. Mondale, until December 1996 the U.S. ambassador to Japan, arrived in Jakarta today. He is said to be carrying a blunt message from President Clinton that Suharto must honor his deal with the IMF.

Mr. Mondale made no comment to reporters at the airport before being whisked away by U.S. Embassy staff.

The former vice president left Washington Saturday.

Mr. Clinton reportedly has phoned the Indonesian leader four times to express concern at his failure to implement most of the measures he promised in return for a $40 billion IMF bailout.

An administration official told Reuters news agency last week that if Indonesia did not implement the reforms, Washington would oppose release of the next $3 billion installment due to Indonesia on March 15.

But Suharto gave no sign that he has grasped that message in his nationally broadcast address yesterday to the Peoples Consultative Assembly, which meets every five years to elect a president.

“There are no signs of improvement yet. On the contrary, the people’s life is becoming more difficult,” he said of the IMF-ordered reforms. “Our economic lifeline {has} begun to be compromised.”

In recent weeks, Suharto has flirted with – and now seems to be backing away from – the adoption of a currency board to control the exchange rate, a move that experts say would ultimately wreak economic havoc.

“It’s another sign he won’t bite the bullet, said one Western analyst. “He wants a painless way out. There isn’t one. And the more he delays, the more it’s going to hurt.”

Food shortages and soaring inflation have caused widespread unrest in recent weeks, with rioting reported in dozens of cities. The government estimates 8 million to 10 million Indonesians will lose their jobs by year’s end as a result of IMF-imposed reforms.

“This is the reason why I have asked the IMF and other heads of government to assist us to find a more appropriate alternative. I refer to the more appropriate concept as IMF-Plus,” Suharto said at the opening of the Peoples Consultative Assembly.

Suharto said he remained committed to the IMF reforms, but added, “in the end, our fate rests in our hands.”

The presidential vote by the 1,000-member assembly, known by its Indonesian initials MPR, will rubber stamp what is already a fait accompli. Suharto and his vice presidential choice, Technology Minister B.J. Habibie, are the only nominees.

Megawati Sukarno, the closest thing Indonesia has to an opposition leader, was forced out of her own party last year in a government-inspired internal coup. Neither she, nor another declared candidate, Amien Rais, head of a 28 million-strong Muslim group, is represented in parliament.

Former Minister Emil Salim, a vice presidential candidate also locked out of the proceedings, told a news conference that assembly members must remember that as Indonesians struggle to survive amid the crisis, the aspirations of the people are not “simply matters that can be handled by the police.”

Some 17,000 police, backed by thousands of troops, have secured the capital for the assembly session.

The show of force follows weeks of high-profile military maneuvers in the city. All rallies and demonstrations have been banned, and military officials have warned they will brook no disorder outside the parliament building.

The same, apparently, will be true inside the hall. Officials running the session warned members of parliament against interrupting the carefully scripted proceedings with “unwanted dissent.”

With public confidence in the government shaken by the economic collapse, the procedures are causing the political system to be questioned openly for the first time.

“The people feel that the opposition parties have breached their trust,” said the Jakarta Post in an editorial that reflected growing public disenchantment with a system that has kept Suharto in office since 1968.

“Not only refusing to sponsor change, they have rubbed salt in society’s wounds by tamely echoing {the ruling party’s} nominations for president and vice president,” the newspaper said

Illustration

Photos, A) Indonesia’s People’s Consultative Committee stands for the national anthem yesterday at the opening of a session expected to re-elect Suharto.; B) President Suharto said reforms to ease Indonesia’s economic crisis should be renegotiated., Both By AP

Credit: SPECIAL TO THE WASHINGTON TIMES

Copyright Washington Times Library Mar 2, 1998

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: