Date: Fri, 09 Jan 1998 19:39:20 -0500
From: Bob Olsen <firstname.lastname@example.org>
Subject: Indoesian Panic
Currency meltdown panics Indonesians; Residents rush to stock up on food
By Michael Richardson,
in the Toronto Globe and Mail
9 January 1998
President Suharto of Indonesia faced the gravest economic and political
crisis of his 32-year rule yesterday as Indonesia's currency and stock
market suffered historic declines.
[.... snip .....]
"While talk of a debt moratorium may be a bit premature, the IMF is
clearly concerned that Tuesday's budget was a deviation from its
guidelines. This has been exaggerated by concerns about Suharto's
position," said Chris Portman, emerging-markets economist at ANZ
Investment Bank in London. "The whole situation in Indonesia is now
In Washington, senior IMF officials said a team of experts will be
sent this week to try to speed up a program of economic reform. The
visit was originally scheduled for later this month.
"We'd like to accelerate the program and strengthen it, because a lot
of people believe the Indonesian government wasn't really committed
to the program," Stanley Fischer, the IMF's first deputy managing
director, told the Cable News Network.
By the end of June, 1997, Indonesia owed $58.7-billion (U.S.) to the
banks, with 59 per cent or $34.66-billion due within 12 months or
less, BIS figures showed late yesterday. The collapse of the rupiah
has sent the cost of paying foreign currency debt rocketing.
Indonesian military authorities have said publicly in recent days
that they expect two million people may soon lose their jobs, and
they have vowed to suppress protests.
[...... snip ......]
On Wednesday, Washington warned Indonesia that it is crucial that it
begin complying with the terms of the IMF bailout. Washington thus
joined the IMF in sending Suharto a blunt message: If Indonesia does
not fulfill its reform commitments, the money will be cut off.
Within the Clinton administration, a debate has already begun over
how to handle Indonesia in coming months. Treasury officials have
made clear that if it did not comply with terms of the IMF accord,
continuing support would undercut the credibility of other IMF
bailouts around the world.
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