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Suharto Meets World Bank Chief

February 5, 1998

JAKARTA, Indonesia (AP) _ Indonesian President Suharto sidestepped queries about the corruption plaguing his government in a meeting with the World Bank chief on Wednesday, instead focusing on the issue of whether Indonesians have enough jobs and food.

In an account of the talk, the World Bank’s James Wolfensohn said he mentioned to Suharto that accountability in the financial system and a halt to corruption are urgently needed to haul Indonesia’s battered economy out of its slump.

``I don’t think there was a direct response,″ Wolfensohn said at a news conference. ``There was really no observation on that point from the president.″

Suharto, who apparently had been reluctant to slash subsidies and monopolies to stem cronyism in the Indonesian economy, agreed to do so last month after coming under heavy international pressure.

The 76-year-old leader’s friends and family, capitalizing on their connections, have grown immensely rich during Suharto’s 32 years in power.

Wolfensohn, who has pledged $4.5 billion in rescue loans to Indonesia, is on a six-nation tour to see how World Bank money can ease the pain of the 7-month-old Asian currency crisis.

Worried that East Asia’s economic malaise will fuel unrest, the World Bank plans to funnel more cash into employment programs to help the millions of people likely to lose their jobs. Sporadic riots tied to hikes in food prices already have erupted in Indonesia.

Wolfensohn pointed out that Indonesia must dismantle many of the elite’s perks to comply with terms of a $40 billion rescue plan led by the International Monetary Fund. The World Bank aid is part of that package.

Suharto was silent on the issue of corruption during the 1 1/2-hour meeting at his home, Wolfensohn said. Instead, the president highlighted what he has achieved in Indonesia, which had enjoyed healthy economic growth until last year.

``He spoke at length about his concern for people in Indonesia ... the need for employment and food,″ the World Bank chief said.

About 100 people held an anti-IMF protest Wednesday outside Parliament, saying the financial crisis is worsening despite pledges that reforms will help the economy.

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