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channelnewsasia.com
26 September 2000 0344 hrs (GMT) 1144 hrs (SST)

IMF says Indonesia has made significant progress over economy

The International monetary Fund says Indonesia has made
"significant progress" in stabilizing its economy
after the crisis of 1997 financial crisis.

However the positive assessment is clouded somewhat by a grim
warning for Jakarta to address its vulnerabilities especially
its efforts to boost political stability.

The latest assessment closely tracked comments issued by the IMF
on 14 September when it approved a US$399 million installment.

Chief among Indonesia's problems, the IMF says, is the lack of
confidence in its leadership.

The fund stresses, the country must dispel political uncertainty
and intensify reforms if economic recovery is to take hold.

Indonesia's IMF programme envisions GDP growth of 3 to 4 percent
for the year 2000.

It also suggests a tighter budget next year, given the growth in
public debt this financial year to provide protection for the
poor.

But the Fund reiterated its disappointment with the slow pace of
corporate debt restructuring, a prerequisite to stimulating new
flows of credit and investment.

It also urged Indonesia to move cautiously with plans to allow
more local autonomy over public spending to ensure sustainable
revenues and delivery of services.

The IMF did however note "considerable progress" in the
recapitalizing state banks.

But state banks continue to suffer high operating costs and low
earnings potential.

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Didistribusikan tgl. 27 Sep 2000 jam 10:45:23 GMT+1
oleh: Indonesia Daily News Online <[EMAIL PROTECTED]>
http://www.Indo-News.com/
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