WSJ: Megawati Camp Endorses IMF

[Robert Weissman <rob@essential.org>]

                   June 16, 1999

                   Megawati Camp Endorses
                   IMF Program for Indonesia

                   By RICHARD BORSUK
                   Staff Reporter of THE WALL STREET JOURNAL

                   JAKARTA, Indonesia -- A top aide to Megawati
Sukarnoputri, saying it
                   is currently impossible to use a fixed rupiah exchange
rate, reaffirmed that
                   an Indonesian government led by her would stick to the
International
                   Monetary Fund's rescue program.

                   Laksamana Sukardi, a deputy chairman of Ms. Megawati's
Indonesian
                   Democratic Party-Struggle and one of her senior economic
 advisers,
                   assured investors on Tuesday of the party's commitment
to the IMF
                   bailout. He described it as "effective in containing the
 damage" to
                   Indonesia's economy, though he said it isn't effective
in restoring what has
                   been damaged.

                   Mr. Sukardi's remarks at a seminar should dispel
                   concerns of some analysts that a Megawati-led
                   government could move onto a collision course
                   with the IMF. Another Megawati aide, Kwik Kian
                   Gie, said earlier Tuesday that "probably now is the
                   best moment to bring the rupiah down by
                   introducing a fixed rate," according to Reuters
                   news agency. The IMF opposes such a move.

                   The rupiah has strengthened by a third in three
                   months, hitting 7,240 to the dollar late Tuesday.

                   But Mr. Kwik also said a fixed rate shouldn't be
                   introduced at the cost of breaking ties with the IMF.

                   Mr. Sukardi said both he and Mr. Kwik are committed "to
continue the
                   IMF program." While party members have different views
on a fixed
                   exchange rate, the conditions needed to have one, such
as huge
                   foreign-exchange reserves, are "presently impossible to
meet," Mr.
                   Sukardi said.

                   Golkar Continues to Trail

                   The comments came on a day when PDI-P, as Ms. Megawati's
 party is
                   known, was maintaining a big lead over the ruling Golkar
 party in the slow
                   counting of votes in the June 7 parliamentary election.
Unofficial results
                   showed PDI-P with 36%, compared to 21% for Golkar, with
55% of the
                   vote counted.

                   While PDI-P is assured of winning the most votes, it
might not be clear for
                   weeks whether the party will control enough seats in
Indonesia's complex
                   electoral system to clear the way for Ms. Megawati to
gain the presidency
                   when a 700-member assembly meets to choose a new leader
by
                   November. (The assembly, known as the MPR, will be
composed of 462
                   elected members of Parliament, 38 Parliament members
appointed by the
                   military and 200 other appointees.)

                   Many Indonesian politicians say it is possible that Ms.
Megawati and any
                   future coalition partners could have a majority of seats
 in the 500-member
                   Parliament, but still fail to garner enough support at
the MPR for her to
                   succeed President B.J. Habibie.

                   Concerns About Minorities

                   Later on Tuesday, the head of a Muslim group close to
Mr. Habibie, in an
                   apparent bid to dent Ms. Megawati's chances of gaining
the presidency,
                   said Indonesia risks falling under the control of
non-Muslims. The
                   Associated Press reported that Achmad Tirtosudiro,
chairman of the
                   Indonesian Muslim Intellectuals Association, said the
candidate list of Ms.
                   Megawati's party is undesirable because it is dominated
by Christians, a
                   minority in Indonesia.

                   The AP quoted Mr. Tirtosudiro, who succeeded Mr. Habibie
 as
                   association chairman last year, as saying: "Legally, we
have to recognize
                   victory by any party. But it will be very dangerous if
it does not heed the
                   aspirations of Muslims ... I cannot imagine that
Christians will have a say
                   over Muslims, particularly in the process of making and
endorsing laws in
                   Parliament."

                   More than 85% of Indonesians are Muslim.

                   Many analysts expect PDI-P to form a coalition with the
National
                   Awakening Party, known as PKB, whose Chairman
Abdurrahman Wahid
                   leads Indonesia's largest Islamic organization. But that
 isn't certain,
                   because some PKB figures oppose a woman becoming
president.

                   Asked whether his party will form a coalition with PKB,
Mr. Sukardi said
                   PDI-P will talk about partners after the vote-counting
is completed, which
                   authorities have said will be Monday. In a swipe at Mr.
Habibie, trained as
                   an aeronautical engineer, Mr. Sukardi said what makes
effective
                   government "isn't a rocket scientist, it's a mandate
from the people. If you
                   don't have it, you can't govern."





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