Indonesia cancels IMF austerity measures
South News May 16
 

Jakarta: As Indonesia's political crisis deepened President Soeharto returned from a foreign tour early Friday and tried to quell the outbreak of social unrest by rescinding IMF induced price rises.

The unpopular rise in energy prices which forced up public transport costs was one of the frequent complaints of people on the streets. His first decision was to revoke price increases on petrol and kerosene, applied to comply with International Monetary Fund fiscal conditions.

Indonesia is struggling to cope with its worst economic and political crisis in decades, and sharp government-ordered increases in the prices of basic goods and services last week pushed the poor to their breaking point. Anger spilled over into the streets Tuesday after police shot and killed six anti-government protesters at a student rally.

The austerity measures were a condition of the International Monetary Fund's $43 billion aid package to bail out the southeast Asian nation. But the IMF continues to defend its rigorous package on Friday, as monetary sources said IMF staffers had already left the riot-torn country.

In Washington, World Bank spokesman Graham Barrett said the bank had chartered a plane to evacuate its international staff from Jakarta, although country director Dennis de Tray and a handful of senior managers would stay in the country according to a Reuters report.

``We want to ensure the safety of everyone who works there and their families. That is our top priority in the region right now,'' Barrett said. He said Indonesian staff were not being evacuated, but would be offered places to stay on the holiday island of Bali or provided with ``safe havens'' in local hotels in Jakarta.

The protesters, bitter at IMF-mandated price rises for fuel and transport, are also seeking political change and an end to the crony capitalism which has enriched the family of long-serving President Suharto.

Mr Suharto's leadership was under intense pressure as speculation mounted that the military would back a special session of the People's Consultative Assembly (MPR) to effect a transfer of power. Fifty prominent political figures including former Cabinet ministers have called on Mr Suharto to step down with dignity in the interest of the nation.

The damage bill from the three-day rampage is set to be in the hundreds of millions of dollars but protesters appeared consciously to choose some targets. Branches of the BCA bank, owned by Mr Liem and two of President Suharto's children, were broken into and ransacked, as were Timor car dealerships, owned by the President's son Tommy.