07/11/2012, 00.00
INDONESIA - FMI

Indonesia provides a mega loan of one billion dollars to save the EU

by Mathias Hariyadi
The decision is the result of binding agreements between Jakarta and the International Monetary Fund signed during the G-20. For the opposition the maneuver will afflict the population even more. The country already has a deficit of 36 billion dollars. In a meeting with the Indonesian President, Christine Lagarde warns that no country is immune from the crisis of the euro.

Jakarta (AsiaNews) - Indonesia will have to pay the International Monetary Fund (IMF) loan of one billion dollars. Experts say the sum is a kind of interest for the economic aid provided by the IMF during the financial crisis of 1998. The news, confirmed by Hatta Radjasa, Minister for Economic Affairs, has sparked harsh criticism from the opposition, which accuses the government of having accepted the IMF's dictates without consulting parliament. The loan was signed in a meeting between Christine Lagarde, the IMF General Secretary, and President Yudhoyono held yesterday in Jakarta. After the meeting, the IMF chief said to the Indonesian media that "no country in the world is immune from the crisis of the euro". The request is part of the loan agreements signed at the summit of the G-20 in Mexico, forcing Indonesia to support the IMF.

I Gusti Agung Rai Wirajaya, a member of the Indonesian Democratic Party Struggle (PDIP), calls the move "reckless" and stresses that the country already has several debts with the Asian Devolpment Bank, the World Bank and the Australian government. The interest will be paid with a tax increase that will impoverish all Indonesian citizens.  Other criticisms come from Megawati Soekarnoputri, former Indonesian president, according to whom the move is damaging, unnecessary and "will increase the suffering of the population." In recent months the government has revealed a deficit in the treasury of billion.

Agus Martowardoyo, Minister of Finance, defends the government's decision and explained that the loan will not affect state coffers, but will be disbursed through the treasury bills of the Central Bank of Indonesia. The minister said the money paid to the IMF is an act of goodwill towards an institution which in 1998 saved the country from the financial crisis that had forced President Suharto to resign. It is also a gesture of friendship to the countries of Europe, whose crisis is also affecting the Indonesian economy.

 

 

 

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