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Elections won't harm economic program

Dow Jones Newswires - February 10, 1999

McCarthy, Jakarta – Indonesian elections and the prospect of a new government this year probably won't derail the country's major economic reform program, the International Monetary Fund's top official in Asia, Hubert Neiss, said Wednesday.

In an interview with Dow Jones Newswires, Neiss said this view was based on conversations with Indonesia's main opposition leaders who, he says, broadly support the government's agreement with the IMF.

"The IMF program is not a big controversial issue among the major opposition leaders," Neiss said. "This is a very positive development that the economic measures of the government are not subject to fierce political dispute, and that is because there's basic, basic agreement among the various opposition leaders that the country should be pursuing this program."

Neiss met this week with major opposition figures, including Abdurrahman Wahid, popularly known as Gus Dur – leader of the country's largest Muslim organization, Nadhlatul Ulama – as well as representatives of presidential hopeful Megawati Sukarnoputri's economic team and others.

Indonesia is set to hold landmark parliamentary elections early June, which will pave the way for presidential elections in November. The poll is expected to be the most open after three decades of authoritarian rule under former President Suharto.

But Indonesia, mired in its worst economic turmoil since the 1960s, has endured riots and protests since Suharto's tumultuous ouster, and many fear renewed unrest in the lead up to the elections and beyond. That instability and political uncertainty is hobbling Indonesia's economic recovery and stalling new investment.

Neiss, who along with an IMF team has just completed a review of Indonesia's economic program, said he gauged the current political situation to be "more certain," however.

Neiss said the passage of electoral laws has helped to bring more certainty. "Some of the uncertainty of the transition has been removed with the election laws, which are basically accepted, so there is more certainty," Neiss said. "You have an election date and you have broad acceptance of elections laws."

Up to 200 political parties have been formed since Suharto's successor, President B.J. Habibie, began dismantling the tightly controlled political system, although only about 30 of them are expected to be deemed eligible to contest the elections.

Last month, Indonesia's parliament approved political reforms that set the stage for the elections. Parliament's most controversial reform was the decision to reduce the number of appointed seats for the military from 75 to 38, thereby allowing it to maintain influence in the 500-member legislature.

Student activists said the reform falls short of real democratic change, but some opposition groups say that gradually phasing out the military's role in politics is acceptable.

Neiss said the meetings with the opposition leaders were useful to "get their input" on the economic situation. The IMF official has met frequently with members of the opposition over the past year, particularly since the ouster of Suharto, to keep them briefed on economic developments.