The International Monetary Fund and the Indonesian Government have jointly pleaded to the international community for additional financial help to rescue the crisis-stricken country from the brink of economic collapse.
The two sides have agreed on revised terms to Indonesia's existing US$43 billion international bail-out package for a third time, but say even this huge amount is now unlikely to be enough given the worsened state of the country's many problems.
Under this latest deal the IMF has been more lenient on government subsidies for food and other necessities and social spending to show compassion to the country's poor and help restore social order.
However, the IMF warns this will come at the expense of a hefty 8.5 per cent budget deficit during this financial year for which it says fresh credit lines are needed from abroad to offset.
'Despite the considerable support being provided by bilateral and multilateral sources, additional balance-of-payments support in 1998/99 of $4 billion to $6 billion from these sources is needed to close the financing gap,' the latest agreement said.
'At this critical moment we are seeking the further support of the international community to ensure the success of our economic programme.' The memorandum, the fourth since last October, was signed yesterday by Indonesia's chief economics minister Ginandjar Kartasasmita and the IMF's Asia Pacific director Hubert Neiss and is likely to result in a resumption in existing agreed lending which has stalled since former President Suharto's downfall last month.
