|Subject: IMF suspends talks on economic program with
Date: Fri, 10 Sep 1999 15:24:49 EDT
IMF suspends talks on economic program with Indonesia
WASHINGTON, Sept 10 (AFP) - The International Monetary Fund suspended discussions with Indonesia on its economic program, a fund spokesman said Friday.
"IMF management continues to keep under close review ongoing developments in Indonesia and discussions for the next program review are on hold," said the IMF spokesman, who asked not to be identified.
"Meanwhile, fund staff will continue to monitor economic developments seeking to preserve as much as possible all that has been achieved during more than one year of close cooperation," he said.
The International Monetary Fund, whose loans are helping Indonesia stave off financial collapse, had warned Thursday of possible sanctions over the East Timor crisis.
IMF First Deputy Managing Director Stanley Fischer at the time described the situation in Timor as "a political disaster."
In the wake of the 1997 Asian financial crisis, the international community put together a 47 billion dollar rescue package -- 12.3 billion of it in the form of credits from the IMF.
Some 10 billion of this has already been pumped into the Indonesian economy.
IMF Asia-Pacific director Hubert Neiss told CNN on Thursday an IMF mission due to arrive in Jakarta in mid-September was "presently on hold," and renewed warnings about the Bank Bali controversy which has mired government and banking officials in scandal.
He indicated Indonesia would have to take action not only over East Timor but also over the Bank Bali scandal if the next review of the bailout was to go smoothly.
The World Bank, which is also supporting the Indonesian economy, reminded Jakarta earlier this week that during an aid donors' meeting in July it had promised to abide by earlier agreements to enforce security in East Timor.
"Following through on the statement ... is a critical component of the policy commitment of the government of Indonesia, setting the context in which the program of international assistance agreed in July is to be realized," the World Bank said.