IMF starts talks on bail-out for Indonesia

The IMF yesterday started urgent talks on its stalled bailout package for Indonesia, as calls mounted for Suharto-linked officials…

The IMF yesterday started urgent talks on its stalled bailout package for Indonesia, as calls mounted for Suharto-linked officials, including the new president, to account for their wealth.

Mr Hubert Neiss, Asia Pacific director of the International Monetary Fund (IMF), began a series of ministerial meetings to assess Indonesia's position following the fall of its veteran leader, Gen Suharto, last week. Mr Neiss said he would later recommend to the IMF board whether the fund should resume paying the second tranche of its sorely-needed $43 billion grant.

But the plunging rupiah and soaring inflation in the past months may mean the whole package will need to be rewritten.

President B.J. Habibie, Gen Suharto's vice-president who took over last Thursday, has said his government will continue to work for comprehensive reform.

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The IMF visit came as the government announced it would release five more political prisoners today, while calls mounted for the administration to take concrete steps to establish a government free of the corruption, collusion, cronyism and nepotism of Gen Suharto's 32-year rule.

Opposition leader Mr Amien Rais called for an independent body to retrieve state wealth unlawfully appropriated and taken out of the country "by certain families".

Mr Rais, leader of the 28-million strong Muhammadiyah Islamic movement, also called on the government to seek a freeze of assets of Indonesians held in banks overseas that might have come from "unclean" sources.

Forbes magazine last year put Gen Suharto's fortune at $14 billion, while other reports valued his family's fortune at up to $40 billion.

On Tuesday the new government released the union leader Mr Muchtar Pakpahan and a former MP, Mr Sri Bintang Pamungkas, two of the country's most senior political prisoners.

International pressure has also been building to free the East Timor rebel leader, Mr Xanana Gusmao. Yesterday US congressman Mr Chris Smith met Mr Gusmao in Jakarta's Cipinang prison.

Indonesia has said it regards Mr Gusmao, leader of East Timor's armed resistance movement until his capture in 1992, as a common criminal not a political prisoner, a position restated yesterday by the country's foreign minister, Mr Ali Alatas. Mr Gusmao was sentenced to 20 years' jail in 1990.