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Last Updated: Tuesday, 6 May, 2003, 05:10 GMT 06:10 UK
Indonesia may end IMF dependence
Indonesian money changer
Ministers announce their desire to end IMF relationship

Indonesia may stop borrowing from the International Monetary Fund (IMF) when its current agreements expire at the end of this year.

"The Indonesian government has the right to end the program with the IMF as mandated by the People's Consultative Assembly," economy minister Dorodjatun Kuntjoro-Jakti was quoted as saying by the Jakarta Post.

Last week, President Megawati Soekarnoputri told a meeting of her economic advisory team, which was attended by one of the country's key donors Japan, that she supported the move.

At the meeting, Ms Megawati reportedly said the relationship had to be ended amicably, to maintain the confidence and support of other donor countries and institutions.

Japan is expected to become Indonesia's lead creditor.

Amicable end

"We recommended that Indonesia make an amicable exit from the IMF programme, to avoid upsets to the economy," Dr Sri Adiningsih, a member of the president's economic advisory team, was quoted as saying by Indonesian newspaper Suara Merdeka after last week's meeting.

Some government official have been highly critical of Indonesia's $5bn, five year loan programme with the IMF, claiming its policies "endangered" the nation.

The IMF is currently reviewing its programme with Indonesia, which if positive would allow the release of $1.8bn to the country this year.

The Fund praised the country on Friday adding that economic growth in 2004 could be more than the government's forecast of between 4% and 5%.

Indonesia's currency, the rupiah, has gained 6.1% in the last 6 weeks and the country's foreign exchange reserves are up $4.7bn over the last 12 months to $33.6bn.

An end to lending from the IMF is expected to drive up Indonesia's borrowing costs with other donors.




SEE ALSO:
Indonesia rejects IMF help
21 Jan 03  |  Business
Indonesian planner slams IMF
03 Jun 02  |  Business


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