RI No Longer Needs IMF Loans, Development Planning Minister Says

JAKARTA (JP): State Minister of National Development Planning Kwik Kian Gie has said that International Monetary Fund (IMF) loans are no longer relevant to Indonesia.

"Letters of intent to the IMF are no longer important," he said, as quoted by Antara after attending a ministerial coordination meeting on development planning here on Wednesday.

Kwik said loans from the IMF had stopped being relevant to Indonesia as, since the first quarter of 2001, the country had been making quarterly payments to the IMF exceeding the amounts in loan it was receiving from the fund.

"So there is no point in hoping for loan disbursements from the IMF. Moreover, the IMF funds are simply being stashed away because they can only be used after the country's foreign exchange reserves in the central bank have been depleted," he said.

Kwik said when the IMF came to Indonesia to help restructure the country's economy it made a commitment to extend loans totaling US$43 billion.

However, by the end of the second quarter of this year IMF loans actually disbursed had amounted to only $12 billion, while $3 billion of the amount was later withdrawn, leaving a cumulative balance of only $9 billion, he said.

Furthermore, Indonesia was not allowed to use the $9 billion as long as its foreign exchange reserves in the central bank had not been used up. "That fact is, our foreign exchange reserves in the central bank, now totaling $18 billion, were never used up," he said.

He added that those who said the IMF's presence was needed to boost world confidence in Indonesia were wrong too because no foreign investor had come to the country since 1997. "So the IMF's presence has actually been of no use because it has neither brought money nor good advice," he said.