Indonesia-IMF Deal Seen Possible --- Prospects for Pact May Aid Sentiment

"There are several problems that still must be solved and we hope that they are finished in the coming days," said Ginandjar Kartasasmita, Indonesia's coordinating minister for economy, finance and industry, at the end of last week. His comments echoed those of the IMF's top Asia...

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Bibliographic Details
Published inWall Street journal. Europe
Main Author By staff reporter Darren McDermott in Singapore And Kate Linebaugh of
Format Newspaper Article
LanguageEnglish
Published Brussels Dow Jones & Company Inc 30.03.1998
EditionEurope
Subjects
American dollar
Bailouts
Bank reserves
Central banks
Debt restructuring
Economic reform
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Summary:"There are several problems that still must be solved and we hope that they are finished in the coming days," said Ginandjar Kartasasmita, Indonesia's coordinating minister for economy, finance and industry, at the end of last week. His comments echoed those of the IMF's top Asia official, Hubert Neiss, who arrived in Jakarta two weeks ago to review and renegotiate the terms of Indonesia's $43 billion bailout package. It now appears that talks on four of five areas are nearly completed: structural economic reforms, monetary policy, efforts to strengthen the banking sector and the review of the nation's budget. Mr. Neiss is due to leave Jakarta this week. His initial statement reflected the commonly held viewpoint in Washington that Indonesia's problems now are as much political as financial. But Mr. Holbrooke, now serving as vice chairman at Credit Suisse First Boston and responsible for the bank's Asian operations, told CNBC Asia Business News that comments he had made to the television station a day earlier were "unduly pessimistic" and had left an "unfortunate impression." He came to that conclusion, he said, after conversations with colleagues in Washington. CNBC Asia Business News is a service of General Electric Co.'s NBC unit and Dow Jones & Co., the publisher of this newspaper. Despite Mr. Holbrooke's flip-flop, a solution to Indonesia's woes is some ways off. Nowhere is this clearer than in the main topic still under discussion in Jakarta, that of how to restructure the nation's $68 billion in private foreign debt. Unlike the other topics, it requires a three-way agreement among the IMF, Indonesia and Indonesia's lenders.
ISSN:0921-9986