IMF in talks to ease Indonesian crisis

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THE International Monetary Fund's top Asian expert, Hubert Neiss, arrived in Indonesia yesterday and went straight into meetings with Indonesian officials in a race against time to work out a way of getting money flowing again into the country.

The new president, Jusuf Habibie, set a positive tone for the talks, which will last until Saturday by starting to release political prisoners and signalling that he was more than ready to hold free general elections, as soon as in a month, if they could be arranged.

Even opposition leaders said a more realistic timetable for elections was six to 12 months because of constitutional and administrative tangles that needed to be resolved after 32 years of autocratic rule by ousted president Suharto.

In a further attempt to boost the credibility of his government, Mr Habibie made a personal visit to the scenes of this month's riots. In a gesture which would have been inconceivable under Mr Suharto, Mr Habibie broadcast messages of encouragement through a megaphone and debated with local people whose shops and businesses were destroyed in two days of looting.

Thousands of local people lined the streets and waved at the president's bus as it drove through the Chinatown district where the worst destruction occurred. "I came here to meet you and express my sincere sympathy," he said. "All have suffered much from the recent turmoil."

Earlier, Mr Habibie told pro-democracy campaigners that he will hold new elections "as soon as possible". "Our target [for holding elections] is between six and 12 months," said Professor Sudjana Sapiie, of the Banding Institute of Technology, after a meeting with the President. "He asked if we can go any faster and we said it was very unlikely. He said if you can do it in one month, then by all means, and I'll be very happy."

On Monday, Mr Habibie told his first cabinet meeting that he would revise election laws which control the political parties and vet their candidates. Early yesterday, the former member of parliament, Sri Bintang Pamungkas, and the trade union leader, Muchtar Pakpahan, walked out of Cipinang jail in Jakarta where they had been imprisoned for their criticisms of Mr Suharto.

But many Indonesians remain sceptical of the new programme, which may have as much to do with the need to win over the IMF as with a genuinely democratic spirit. "We need a firm time frame for general elections," said Emil Salim, a former ministery. "It is not enough to say they will be held as soon as possible."

The IMF's $43bn (pounds 26bn) bail-out programme is the last hope for Indonesia's economy which has been ravaged by the Asian economic crisis and now by the riot.