Current Economic Turmoil Is Inseparable From Toxic Prescription of IMF
Indonesia has been applying various financial prescriptions offered by IMF, “So, the country’s vulnerable condition during economic crisis is inseparable from the responsibility of IMF,” said senior researcher of CORE Indonesia Muhammad Ishak, on Wednesday (2/8) to mediaumat.com.
As a member state of IMF, he said, Indonesia is bound to rules issued by IMF, among others be willing to be supervised by the agency (known as ‘country surveillance’). Therefore, IMF has routinely monitored and provided advice to Indonesian government.
“So, although currently Indonesia has no debts to the IMF, the agency continues to offer advice. The arrival of IMF Director, Christine Lagarde, yesterday to Indonesia was meant to give advice to the government in dealing with strategies to take to cope with the current economic conditions.”
IMF Director emphasized the needs for fiscal discipline, meaning that unproductive expenditures such as subsidies should be reduced. Another thing is that the government needs to reduce barriers for private sectors to invest in this country.
“It has become a standard prescription of the IMF to its member states to continue liberalizing the economy,” said Isaac.
During the Asian crisis in 1997-1998, the IMF interference to Indonesia was by providing loans on condition that Indonesia should be willing to cooperate with the agency to adopt structural reforms in the economy such as: liberalizing monetary and banking, fiscal decentralization, tax reforms, privatizing of state owned enterprises and the liberalizing foreign trade.
There are many laws masterminded by the agency which include: Law on Foreign Exchange Traffic and Exchange Rate System, Law on Banking, Law on Central Bank and Law on Tax. “All of these provisions are still used as guidance for the government,” said Isaac.  Joko Prasetyo/Riza