IMF official: Suharto realizes need for success

Negotiations between Indonesia and the International Monetary Fund (IMF) over implementation of the IMF's bailout package are proceeding smoothly, a high-ranking IMF official said Friday in Tokyo.

Even though he couldn't say exactly when agreement will be reached, the Indonesian government is apparently aware it is essential to conclude the talks successfully, the IMF's Deputy Managing Director Shigemitsu Sugisaki said in an interview with Asahi Evening News and Asahi Shimbun.

Indonesia and the IMF have been holding talks in Jakarta to reconcile differences over the implementation of economic reforms that Indonesia must promise in exchange for the bailout program.

The IMF recently withheld a $3-billion (390 billion yen) installment of its bailout forIndonesia, saying President Suharto was not moving fast enough on promises to overhaul Indonesia's economy.

Sugisaki was in Tokyo to attend a two-day meeting until Friday of deputies of finance ministers and central bank governors from 14 Asia-Pacific economies, including Japan, the United States, Australia, Indonesia, the Republic of Korea (South Korea) and Thailand.

The meeting was aimed at following up on initiatives of the so-called Manila Framework reached in November that called for ad hoc aid to ailing Asian economies in line with economic programs worked out by the IMF.

Referring to the "architecture of the international financial system" included in the meeting's joint statement, Sugisaki said it was essential member countries provide more detailed economic and financial data.

"It is important for investors to be informed (of sufficient data)," Sugisaki said, citing the need to include external short-term debts in the IMF's existing "Special Data Dissemination Standard" to prevent a repetition of Asian financial crises.

The participants in the Tokyo meeting focused on reviewing progress in economic reforms in Indonesia, South Korea and Thailand that are all now under economic adjustment programs worked out by the IMF in exchange for aid.

While the economies of South Korea and Thailand have improved as a result of the implementation of policy measures in their programs, the Indonesian economy "remained more challenging," the statement said.

The statement urged the Indonesian government to reach an agreement with the IMF as soon as possible in order to "stabilize its economy and to put it back on track toward sustained growth."

The statement specifically emphasized that "corporate debt remained one of the key issues that required to be addressed expeditiously."

In the interview, Sugisaki also referred to issues related to corporate debts. He said it was necessary that the private sector be involved in resolving financial crises.

"It is necessary for the private-sector such as banks to assume a certain share of the burden to solve problems," he said, touching on the need to find a way to authorize a temporary stay on payments in an external financial crisis