Editorial: IMF Has Its Hand Out and Is Looking to Indonesia
How times have changed. Fourteen years since the 1998 financial crisis, when Indonesia had to borrow from the International Monetary Fund to shore up its economy, the nation is now an upstanding donor to the multilateral lending institution.
It is a proud day for Indonesia for it to be able to loan the IMF $1 billion as a symbol of its financial independence and its growing stature as an economy. Having once been a recipient of financial support from the IMF, it is only right that the country now extends a lending hand to institutions in financial need.
President Susilo Bambang Yudhoyono expressed his pride in the country’s pledge to the IMF, and rightly so. “Now Indonesia can take a bolder stance with the IMF, as its debt has been repaid in 2005,” he noted after meeting IMF managing director Christine Lagarde.
The loan will not be taken out from the state budget but will be withdrawn from Bank Indonesia’s foreign reserves, which stood at $106 billion at the end of June. Clearly, the country has the ability to be a lender to the IMF.
In fact, visiting German Chancellor Angela Merkel noted that Europe could learn from Indonesia’s fiscal discipline. The government must be commended for the brilliant job it has done in ensuring that the economy continues to grow.
But even as it plays an increasingly bigger and more constructive role on the world stage, the government must not take its eye off pursuing domestic development targets. It must continue to push for bureaucratic reforms and accelerate investments in infrastructure. It must improve education and health care so we can improve the quality of our human resources.
Indonesia can and should be rightly proud of its accomplishments during the past decade.