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Indonesia Considers Leaving IMF

Indonesia - the world's fourth most populous nation and most populous Muslim nation - is considering no longer dealing with the International Monetary Fund when the current deal expires in November,
Laksamana - [Indonesian] National Development Planning Minister Kwik Kian Gie has urged the [Indonesian] government to stop dealing with the International Monetary Fund (IMF) when a financial assistance program expires in November.

Indonesia's economic wheel will run without the help of the IMF, Kwik said Monday (3/6/02) before attending a cabinet meeting led by President Megawati Sukarnoputri.

"If the IMF could have negotiations to end the contract, it would be fine," he was quoted as saying by state news agency Antara.

Kwik, who is also a deputy chairman of Megawati's Indonesian Democratic Party of Struggle (PDI-P), recently said the IMF had "colonized" the Indonesian economy.

In his comments on Monday, he said agreements with the IMF have failed to help the Indonesian economy make any significant progress and were actually "dangerous".

He suggested the government instead intensify cooperation with other donor groups, primarily with countries grouped in the Consultative Group on Indonesia (CGI).

Kwik said the IMF had done little but force the government to sign a letter of intent and then held onto assistance funds.

"Only after the letter of intent was signed did the IMF agree to disburse financial aid of $400 million. But not a dollar can be used until the international reserves in Bank Indonesia are all used up. The $400 million fund is utterly useless," he asserted.

"But this is my personal standpoint, not the government's," he added cautiously.

Kwik on Sunday said that since the IMF entered Indonesia in 1997, the nation has been bound to the Fund's rules and policies, and was now heading toward further economic bankruptcy and disorder.

"Indonesia was dominated for hundreds of years and has succeeded in gaining independence. Yet the independence is only in the form of paper, as we are now faced with another form of domination - economically, financially and politically", he said.

Kwik has long been outspoken on matters of economic policy and his comments are often at odds with those of his colleagues in cabinet, indicating the fractious nature of Megawati's administration.

His latest outburst is hardly surprising but it may jeopardize the generally diplomatic relations between Indonesian and the IMF.

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