INDONESIA URGED TO DEREGULATE ITS ECONOMY

  World Bank President Barber Conable
  linked increased borrowing by Indonesia, the Third World's
  sixth largest debtor, to fresh measures to deregulate trade and
  dismantle protectionist barriers.
      "We would like to see the Indonesian government continue the
  adjustment process ... To move towards increased deregulation
  of the economy," Conable told a press conference at the end of a
  three-day visit to Jakarta.
      Conable directly linked further Bank help for Indonesia's
  hard-pressed balance of payments to further measures by the
  government to reduce protectionism and increase efficiency.
      The World Bank last month granted Indonesia a 300 mln dlr
  trade adjustment loan. He said further loans would depend on
  the economic policies Indonesia adopted.
      But he said that in meetings with both President Suharto
  and leading Indonesian ministers he had not called for specific
  policy changes.
      "The initiative will have to rest with the Indonesian
  government. We are not here to dictate to them," he stated.
      Indonesia, the only Asian member of Opec, has been badly
  hit by last year's slump in oil prices which cut its revenues
  from crude exports in half.
      Conable had what he termed a frank meeting this morning
  with Suharto.
      He voiced support for measures already taken, including
  September's 31 pct devaluation of the rupiah, and efforts to
  deregulate imports and stimulate exports.
      "The government can rely on the support of the World Bank in
  a continuing program of adjustment to the economic realities of
  today's world," he said.
      The Bank has loaned Indonesia 10.7 billion dlrs over the
  past 20 years. Lending is now about one billion a year.
      The World Bank would probably like to see further
  dismantling of tarrif barriers and measures to reduce
  Indonesia's protected monopolies in areas like steel, plastics
  and cement, western bankers and diplomats said.
      The government has already said it will announce further
  deregulation measures, but has given no timetable. It is also
  considering selling off loss-making state companies.
      Conable said the Bank would try to help Indonesia find
  funds to cover its share of development projects, which
  otherwise would have to be scrapped or postponed. Japan's Ex-Im
  bank announced a 900 mln dlr untied credit last month.
  

