Camdessus Commends Indonesia's "Impressive" Economic Policy Program

• Pages: 337-338

Page 337

On October 31, IMF Managing Director Michel Camdessus warmly welcomed Indonesia's "impressive program of macroeconomic adjustment and structural reform," which had been introduced that day. Camdessus said,"I strongly commend the actions taken by the authorities and the strength of the commitments they have made in this program, which have made the decision to lend support to their efforts an easy one. These measures should restore confidence in the Indonesian economy and contribute to the stabilization of regional financial markets.

"The program is based, in the first instance, on strong monetary and fiscal policies, designed to bring about an orderly adjustment in the economy and to restore confidence to financial markets. The second leg of the program consists of a major restructuring of the financial sector, along with measures to ensure its future soundness. The third leg involves significant deregulation measures and trade reforms that should have an immediate and long-lasting effect in improving economic efficiency. Simultaneous efforts to promote transparency and openness will significantly improve the governance framework and the business climate.

These measures should restore confidence in the Indonesian economy.

-Camdessus

"On November 5, under the emergency financing mechanism, and in view of the major improvements that this program is designed to bring about in the longer-term prospects of the Indonesian economy, I will be asking the Executive Board to approve Indonesia's request for a three-year Stand-By Arrangement in the amount of about $10 billion (SDR 7.3 billion). In addition to the IMF funding, the reform program will be Page 338supported by substantial financing from the World Bank and the Asian Development Bank, which have made notable contributions to the design of the program, particularly in the field of financial sector rehabilitation and structural reform. These...