The United States on Friday welcomed Indonesia's agreement with the International Monetary Fund, offering $1 billion in trade finance as an incentive for President Suharto to stick to reforms.
"I welcome the agreement between the government of Indonesia and the International Monetary Fund on a revised Letter of Intent," U.S. Treasury Secretary Robert Rubin said in a statement."The key to its success is the Indonesian government's implementation now and over the long term," Rubin added.
Citing the IMF agreement, the U.S. Export-Import Bank said it was willing to provide up to $1 billion in short-term financing to Jakarta. The short-term financing would help U.S. exporters do business in Indonesia and help Indonesian firms buy U.S. goods.
The memorandum on economic reforms was Indonesia's third such agreement with the IMF in less than six months. The 117-point reform program, agreed after more than three weeks of talks with the IMF, will overhaul the way business is done in Indonesia if fully implemented.
Hoping to convince skeptics this will be done, the government set target dates for implementing all key points. It promised a new anti-monopoly law by the end of the year, moves to set up a bankruptcy law and a special bankruptcy court by April 22 and regulations for winding up of companies, mergers and acquisitions by the end of September.
The government promised transparent and competitive bidding for public infrastructure contracts, ministerial statements and newspaper advertisements to explain official decisions and procedures to deal with public comp-laints.
"This agreement supports a comprehensive program designed to restore financial stability and growth in Indonesia," Rubin said. "The United States and the international community have a major stake in seeing Indonesia succeed in its efforts."
Earlier on Friday, Rubin urged Jakarta to follow the examples set by South Korea and Thailand, the other countries hard-hit by the financial crisis.
"Korea and Thailand really have taken hold of reform and made it their own," Rubin told reporters after meeting with Philippines President Fidel Ramos in Washington.
"And while they obviously have enormous challenges to deal with going forward, they really have made these programs their own and that is what hopefully Indonesia will do," he said.
There have been doubts about Indonesia's commitment to reforms since it dithered on the previous two agreements, signed in exchange for a $40 billion IMF-led bailout. The IMF delayed a $3 billion payment last month because it was worried about the way Indonesia was implementing the reforms.