Marianne Kearney, Jakarta – Indonesia's highest legislative body is likely to call on the government to end ties with the International Monetary Fund, arguing that its prescriptions are not suitable for the country.
But the National Assembly (MPR) will ask President Megawati Sukarnoputri at its sitting today to end such ties only after the existing agreement with the fund expires in 2003 and not before.
In a climate of increasingly nationalist rhetoric, several politicians as well as National Development Planning Minister Kwik Kian Gie have criticised Jakarta's dependence on the IMF in recent months.
This week, legislators from the National Assembly said they would ask the government to end ties with the IMF and other foreign donors.
"We have been working with the IMF for years, and it has caused us a lot of disadvantages and few benefits. The IMF prescriptions were unsuitable for this country," said Mr Syamsul Balda, a legislator from the parliamentary commission drafting a series of recommendations for the government.
Such recommendations would be presented to the President at the end of the assembly's annual meeting this weekend. But political analysts point out that none of the recommendations is binding.
The IMF has been coordinating a US$5 billion assistance package for Indonesia since 1998 in return for promises of economic reforms which are spelt out periodically in letters of intent.
While some local news reports have suggested that the MPR will advise the government to cut ties before the current agreement ends, officials from the Co-ordinating Ministry for Economic Affairs say today's recommendation will instead call on the government to develop an exit strategy for Indonesia's economic management once the agreement expires.
"As far as we understand, the deliberation from Parliament is advice for the government on to how to deal with the agreement after it expires," said Mr Mahendra Siregar, a spokesman for the ministry. "As far as relations with the IMF are concerned, there is no other alternative," he added.
The most recent debt re-scheduling agreement with the IMF was signed by Finance Minister Boediono in December last year and could not be re-scheduled again or broken, he said.
Another legislator from the parliamentary commission said the MPR would not ask the government to abort the IMF agreement but just make recommendations. "The government should make efforts to prepare the best possible exit plan so that there are no financial shake-ups," said legislator Alex Litaay.
Two months ago when the Economic Ministry announced it had renewed an agreement with the IMF last year, Mr Kwik, a former economic czar, as well as other politicians including Vice-President Hamzah Haz, had called on the government to drop the agreement.
The IMF agreement is often criticised by politicians, who argue that its privatisation requirements would mean sale of state assets to foreign companies.
Meanwhile, Mr Kwik, after meeting representatives of the IMF on Wednesday, told reporters that he disagreed with the fund's assessment of Indonesia's economy and ways to improve it.
"The IMF says the development of the macro economy will bring happiness. I said to them I hope that is so. But I have a different opinion," he said.