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IMF admits mistake in RI reform agenda
The visiting managing director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, partly admitted to mistakes in the economic reform programs it imposed as part of its bailout package to the country more than a decade ago
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he visiting managing director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, partly admitted to mistakes in the economic reform programs it imposed as part of its bailout package to the country more than a decade ago.
Strauss-Kahn said in Jakarta on Wednesday that the experience in handling Indonesia’s economic crisis more than a decade ago led to many changes in IMF policy.
“Certainly, we also did right and also did something wrong and we have to accept that,” he said at a press conference after a 30-minute meeting with President Susilo Bambang Yudhoyono at the Presidential Palace on Wednesday.
Strauss-Kahn said the experience the IMF received in Indonesia helped the agency avoid similar mistakes in providing bailout funds for other countries.
The reform programs imposed on Indonesia as part of the bailout package had been “harmful and painful for the Indonesian people,” Strauss-Kahn added.
“But the consequence of this is that the IMF has changed a lot,” he said, adding that there were major changes in the agency’s policy since then, in which the voting power and the voice of Asian countries had increased significantly.
“The last reform we made in the governance changed the IMF to reflect better the state of the world. And in the current state of the world, Asia in general, Indonesia in particular, has a bigger role than in the past.”
The IMF was the key player in handling the Asian financial crisis, which started in Thailand in July 1997 and spread to other Asian countries, including Indonesia. The economic reform programs imposed by the agency as part of its US$40 billion bailout package for Indonesia, for example, put the country into a deeper recession.
In the press conference, the IMF chief praised the recent economic development in Indonesia, adding that Indonesia would no longer need some loans, particularly in the short term.
“Do we expect now to make some loans to Indonesia? You don’t need that. If needed, we would be happy to help. But obviously you don’t need that, I don’t see in the foreseeable future that you may need it,” he said in response to whether his visit was linked to an offer for new loans to Indonesia.
Strauss-Kahn predicted Indonesia’s economic growth could surpass 6 percent this year.
“I expect a rather high growth for Indonesia this year. I don’t see any real problem [which may affect growth] this time,” he said.
This marks the second visit by the IMF head to Indonesia in the last four years after Indonesia paid off its total debt.
President Yudhoyono said that as Indonesia had paid off its debt, the government could stand equal before the IMF to give advice to continue reform to restart global economic development.
“We are in a different position to 10 years ago. We are now in a more respectable position,” he said when opening a Cabinet meeting later on Wednesday.
