Word: camdessus
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Suharto has been playing hardball with IMF chief Michel Camdessus for months over a $43 billion bailout agreement to restore confidence in his economy. Jakarta has repeatedly reneged on reforms, particularly those requiring the dismantling of lucrative monopolies controlled by Suharto's children and close friends. By telling the IMF that he wants aid on his terms and not theirs, Suharto has effectively bet Indonesia's entire economy, a wager so outlandish that foreign bankers in Jakarta have trouble concealing their admiration for his audacity even as they despair of his cavalier approach to balance-sheet realities. His brinkmanship...
...Camdessus: No. We have never hesitated to interrupt our financing when a country doesn't fulfill its commitment. Of course, we will have to do that with Suharto if--but I hope this will not be the case--he ignores his signature and his pledges. I have no leeway on this. There are conditions established by an executive board representing the entire world...
...Camdessus: By not disbursing? I think I would be taking more risks for the world if I were to ignore an agreement signed with a country...
...Camdessus: It would be extremely serious, not only for the world but for the country itself. After all, what we have agreed with Indonesia was not some theoretical vision of the world. It was the well-thought-out program we agreed was in the best interests of Indonesia. To renounce this now would be to renounce an undertaking seen by the entire world as the best course for the country...
...Camdessus: The Asian crisis is a formidable impetus for us to continue our efforts to achieve good governance, to make institutional changes, to fight against corruption. It's alleged that the IMF applies the same medicine in all countries. Look at the programs in Thailand, Korea and Indonesia. The medicine in each instance is very, very different. If you will take them, you will see how strongly centered they are on fighting chronic corruption, monopolies and bad procedures. If these programs end up making the countries stronger, it will be because they make a strong effort in correcting these governance...