Down to Earth IFIs Update

The GoI signed a new 63 point Memorandum of Economic and Financial Policies (MEFP) which will be submitted to the International Monetary Fund Board in Washington, USA at the end of August. The MEFP - previously known as Letter of Intent (LoI) is the third made during President Abdurrahman Wahid's administration. Indonesia is committed to a IMF review and new agreement every two months. If the IMF board of directors approve the US$400 million tranche it will be released in Late August. The new Memorandum of Economic and Financial Policies contains at least seven economic reforms agenda, namely macroeconomic policy, fiscal decentralisation, banking system reforms, corporate restructuring, legal reform, and governance, public sector reforms and governance.

Economic adviser to Gus Dur, Faisal Basri said that the President would prefer foregoing aid from IMF and is very critical of the IMF. "At the bottom of his heart, he thinks it is better for Indonesia to quit the IMF (programme) as soon as possible," the adviser said. Dr Faisal's revelation is significant as it confirmed a widely-held view that Jakarta is tired of being regulated by the IMF. The only reason why the strong nationalist fervour against IMF imposition is kept in check is Indonesia's lack of alternative funding for its recovery programme.
(Antara 14 July; Business Times 14 July)

The new agreement includes several controversial areas such as:

• Fuel subsidy reductions - The deal says "the first adjustment…will be implemented in October, supported by protection for poor consumers." The IMF fails to recognise that the poorest will not be protected for the same reason that the JPS (the social safety net) bypassed the poorest. That is because claimants prove entitlement through the KTP Identity Card and/or the BKKBN card, which the poorest cannot afford to buy.

• Accelerated Privatisation Dogma - The deal says GoI will "speed up privatisation and asset disposal… the FY 2000 privatisation program now includes a total of 19 enterprises". This will likely lead to large job losses. Pertamina recently sacked 19,000 workers, in an 'efficiency drive' towards privatisation in 5 years time.

• Opening up to transnational corporations - The deal says the GoI will be "narrowing the list of sectors that are closed to foreign investment."

• Building up foreign exchange reserves - these funds could be used for social programs

• KUT Farmers credit is to be left to the market - so poorer farmers may suffer… "from October, working capital for farmers will be extended only through commercial banks, which will make independent credit decisions and bear all repayment risk."

Bankrupt the World Bank!

80% of the money the World Bank uses to make its loans actually comes from the sale of bonds to institutional investors (pension funds, universities, municipalities, etc.). A campaign initiated by activists in Haiti and South Africa is demanding that the Bank immediately cease its structural adjustment programs. Until it does so, they are calling on those who buy and sell those bonds to suspend their business with the World Bank. See http://www.worldbankboycott.org

New IMF Role?

Faced with mounting scepticism over its role in alleviating the plight of the world's poorest nations, the International Monetary Fund has unveiled its own strategy for tackling global poverty. Addressing a meeting of development policy experts in Berlin, IMF Deputy Managing Director Eduardo Aninat argued that the fund has hit upon a formula that finally will deliver results, in return for the billions of dollars to be pledged in support of poor nations. In the future, Aninat argued, the macroeconomic targets set for poor countries by the IMF will be tied explicitly to the improvement of social conditions. Familiar IMF prescriptions - namely lower inflation, deficit reduction and currency stability - will be laid down with an eye firmly cast on their potential benefits for the poor. The key, Eduardo Aninat said, rests with the concept of "Poverty Reduction Strategy Papers," which now must be produced by poor nations seeking loans from the IMF and the World Bank. Aninat said "all donors" - not just Bretton Woods lenders - will base their future support for poor countries on these strategy papers. He explained that these economic and social policy blueprints will have the added advantage of acting as conduits for input from civil society groups and NGOs, which have emerged as potent lobby groups through their protests in Seattle and Washington in the past seven months.

Correction

In IFIs update No 6 it states that: "The World Bank held a workshop on Indigenous Peoples, Forest and the World Bank, in Washington 9-10 May". This is incorrect as the workshop was initiated by FPP and jointly organised and hosted by FPP and BIC (US-NGO). Bank staff were invited to participate in the workshop and 16 staff turned up over the two days to listen to the nine case studies presented by indigenous peoples and NGOs from Latin America, Africa, India and Asia. It was also incorrect to suggest that the workshop "complemented the series of consultations held by the Bank in late 1998" (although this was an intention of the workshop - it was not the Bank's initiative. The key objective of the workshop was to reaffirm indigenous concerns and aspirations before the Bank issued its new draft of the IP policy).

New ADB Website

The ADB has launched a hugely expanded website with a homepage for each country.
But not yet in bahasa Indonesia!

ADB Web-site    http://www.adb.org

ADB Indonesia Mission    http://www.adb.org/irm/about.htm

ADB Activity in Indonesia    http://www.adb.org/irm/activities.htm

Free IFI E-mail Publication

The Globalisation Challenge Initiative distributes a free quarterly publication, "News & Notices for IMF and World Bank Watchers. The quarterly publication demystifies the role of the two institutions in the globalisation process and offers concrete proposals for transforming them.
To subscribe, email: conf_moderator@coc.org

Annual meetings in Prague

Going to Prague? See also this Month's Factsheet

The World Bank and IMF are now accepting applications for accreditation to the Annual Meetings in Prague. The meetings will be from 24th-27th September (IMF Committee meeting is on 24th and the Development Committee meeting is on 25th).There is no immediate deadline for applications for visitor status, but all must be verified by the Executive Directors, this means there could be some delay in receiving accreditation so applications should not be left too late. They should be sent by the beginning of September at the latest). NGOs can register either as visitors or as NGO press. The former provides slightly less access ie you do not gain access to press facilities or to all the seminars, although many important seminars are classified as public policy fora to which anyone with accreditation can attend. NGO press accreditation gives access to the press room and all seminars but access to the NGO room is possible only with a "visitor accredited" escort. To qualify for press accreditation you must be able to demonstrate that the NGO publication you write for is circulated beyond the membership, ie to those outside the organisation. The deadline for NGO press accreditation is August 11th. This year you will receive a letter (after September 1) stating whether or not your application has been accepted. For visitor accreditation send applications (see World Bank website: www.worldbank.org) by fax or mail to:

Thelma A. Guerra, Officer for Special Guests and Visitors
Joint Secretariat, IMF - World Bank Group
Washington, DC 20431, USA
Fax: (202) 623-4100
Tel: (202) 458-0264

For press accreditation and details of arrangements and press events see: www.imf.org/external/AM/2000/prague.htm