http://www.thejakartapost.com/detaillatestnews.asp?fileid=20051005173220&irec=4
IMF welcomes RI's 'courageous' decision to cut fuel subsidies SINGAPORE (AFP) The International Monetary Fund (IMF) on Wednesday welcomed Indonesia's "wise and courageous" decision to cut fuel subsidies and urged other countries to do the same. Maintaining fuel subsidies will hurt countries in the longer term, the IMF's top economists warned at a forum in Singapore, but they said any reduction should be calibrated and well explained to the public. In a move to avert a potentially explosive fiscal crisis, cash-strapped Indonesia said Saturday it was more than doubling the average cost of fuel, effectively slashing fuel subsidies. The decision sparked street protests but the IMF said the move should shore up investor confidence in the country. "This has been an extremely good step in the right direction," IMF chief economist Raghuram Rajan told the Singapore Press Club. "The subsidies were weighing on the government's fiscal account and there were concerns being expressed by both international and domestic investors," he said, adding that Jakarta's subsequent move to raise interest rates was aimed at warding off inflation. "I think the problem when governments absorb the price of fuel ... the question is when do they stop? And with Indonesia it was amounting to 3.0 percent of GDP (gross domestic product) approximately. "We welcome this step and we think it is something that many countries in the region should adopt." The IMF's deputy director for Asia, Wanda Tseng, described it as a "wise and courageous decision". She said the subsidies were ecoming "unsustainable" as they accounted for 25 percent of government spending. (**) [Non-text portions of this message have been removed] ------------------------ Yahoo! Groups Sponsor --------------------~--> DonorsChoose.org helps at-risk students succeed. Fund a student project today! http://us.click.yahoo.com/O4u7KD/FpQLAA/E2hLAA/BRUplB/TM --------------------------------------------------------------------~-> *************************************************************************** Berdikusi dg Santun & Elegan, dg Semangat Persahabatan. Menuju Indonesia yg Lebih Baik, in Commonality & Shared Destiny. http://www.ppi-india.org *************************************************************************** __________________________________________________________________________ Mohon Perhatian: 1. Harap tdk. memposting/reply yg menyinggung SARA (kecuali sbg otokritik) 2. Pesan yg akan direply harap dihapus, kecuali yg akan dikomentari. 3. Reading only, http://dear.to/ppi 4. Satu email perhari: [EMAIL PROTECTED] 5. No-email/web only: [EMAIL PROTECTED] 6. kembali menerima email: [EMAIL PROTECTED] Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/ppiindia/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
