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 Tuesday, 21 January, 2003, 12:46 GMT
Indonesia rejects IMF help
Protestor outside the IMF meeting
There were angry protests outside the meeting
Indonesia has said it wants to free itself from the International Monetary Fund's (IMF) restrictive economic policies.

Chief economics minister Dorodjatun Kuntjoro-Jakti told an annual meeting of donors that he did not want to extend a $5bn loan pact after it expires at the end of the year.

On Monday, the Indonesian Government caved in to public pressure by reversing its earlier decision to raise fuel prices in line with market forces.

Such prices rises are a key component of economic reforms dictated by the IMF in order to secure loans.

Indonesia's decision to go it alone without the IMF's help came after the country won $2.7bn of loans from the Consultative Group on Indonesia.

The multi-billion-dollar loan was approved at a meeting of financial donors in Bali on Tuesday.

Improved stability

The IMF came to Indonesia's rescue after the Asian financial crisis in 1997.

But there have been ongoing protests over the conditions the IMF attaches to its loans, namely the opening of markets to foreign competition.

In 1998, widespread riots over IMF-prescribed prices rises were one of the key factors that led to the downfall of Indonesia's strongman Suharto.

Analysts said improved foreign exchange reserves and a more stable currrency may have given Indonesia the confidence to try to survive without the IMF's help.

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  Rizal Ramli, ex-economics minister
"The benefit of the ballgame is less than the cost."
See also:

20 Jan 03 | Business
20 Jan 03 | Asia-Pacific
02 Oct 02 | Business
15 Aug 02 | Business
19 Oct 02 | Business
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