E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 105 CONGRESS, SECOND SESSION Vol. 144 WASHINGTON, TUESDAY, MAY 19, 1998 No. 64 House of Representatives The House met at 10:30 a.m. its program underestimated the politi- Given this horrific outburst of vio- f cal fragility and instability, both polit- lence in Indonesia, Congress has an im- ical and social, of Indonesia. This is a portant obligation to examine the role MESSAGE FROM THE SENATE relevant concern because political in- of the IMF and the role it has played in A message from the Senate by Mr. stability could well undermine the po- contributing to this situation with, I Lundregan, one of its clerks, an- tential for economic stabilization. might add, the use of U.S. taxpayers' nounced that the Senate passed a bill In yesterday's Wall Street Journal dollars. While it is clear that the poli- of the following title, in which concur- there was an article, and I would like cies of the Indonesian government had rence of the House is requested: to read a few lines from it. Date line, caused severe economic problems, it S. 1723. An act to amend the Immigration Washington: appears that the IMF conditions made and Nationality Act to assist the United Last fall, Indonesia turned to the Inter- the situation even worse. States to remain competitive by increasing national Monetary Fund for an economic life The fragility of the political environ- the access of United States firms and insti- raft. Instead, the resulting IMF program ment and the potential for violence tutions of higher education to skilled person- contributed to the turmoil now wracking the must be adequately considered when nel and by expanding educational and train- world's fourth most populous nation. The ing opportunities for American students and considering these programs. For exam- IMF program failed to stabilize the Indo- ple, is it not evident that the IMF for- workers. nesian economy, its stated purpose. As the f economy worsened, domestic dissatisfaction mally integrated a political risk analy- grew. sis into the economic program? Obvi- MORNING HOUR DEBATES And it goes on, ously, it failed to do so. If the IMF pro- gram failed to address the potential The SPEAKER. Pursuant to the Jeffrey Sachs, whose Harvard institute has order of the House of January 21, 1997, long been an adviser to Indonesia, has been that it could destabilize political, so- the Chair will now recognize Members warning for months that the U.S.-backed cial and economic conditions even fur- from lists submitted by the majority IMF prescription was harsh and counter- ther, then it was flawed to start with. and minority leaders for morning hour productive. Congress has the public need and the debates. The Chair will alternate rec- In addition, it goes on, ability to examine the IMF staff re- ognition between the parties, with each Malaysian prime minister Mahathir views of the bailouts to determine party limited to 30 minutes, and each Mohamad also blames the IMF for worsening whether the risks of the IMF program Member, except the majority leader, Indonesia's problems. ``The IMF is not sen- were adequately considered. We have the minority leader, or the minority sitive to social and economic restructuring,'' that responsibility and the IMF should whip, limited to 5 minutes. he said, according to Malaysia's official news give us the information. These docu- The Chair recognizes the gentleman agency. ments have been requested repeatedly from New Jersey (Mr. SAXTON) for 5 To answer these questions, more in- of the IMF and the Treasury Depart- minutes. formation is needed to understand the ment. It has been made clear that they f International Monetary Fund program may be sanitized before their release. and its recent impact on Indonesia. Mr. Speaker, I include the entire ar- IMF PROGRAM SPARKS Once again I call on the IMF and the ticle from the Wall Street Journal for INDONESIAN TURMOIL Treasury to publicly release its staff the RECORD: Mr. SAXTON. Mr. Speaker, Ameri- reviews of the Indonesian bailout so [From the Wall Street Journal, May 18, 1998] cans across our country have seen tele- that Congress, the public, and private TIME WILL TELL IF IMF HELPED SAVE OR vised pictures of rioting in Indonesia, experts can better understand the IMF WRECK INDONESIA of social unrest and political unrest policy and its effects. (By Bob Davis and David Wessel) and, according to various news service Previous problems with the IMF pro- WASHINGTON.ÐLast fall, Indonesia turned accounts, the outbreak of rioting in In- gram were documented in the New to the International Monetary Fund for an donesia was triggered by price in- York Times article last winter which economic life raft. Instead, the resulting creases of basic commodities mandated reported that the International Mone- IMF program contributed to the turmoil now by the International Monetary Fund. tary Fund reviewed and found that the wracking the world's fourth most-populous One recent Reuters news story notes IMF conditions had sparked a bank run nation. The IMF program failed to stabilize the In- that the IMF conditions were ``A key on Indonesia several months ago. In re- donesian economy, its stated purpose. As the cause of the recent demonstrations.'' cent days the Wall Street Journal has economy worsened, domestic dissatisfaction The recent violence raises important also come to similar conclusions, and I grew. The fund also high-lighted what the questions about whether the IMF and just read from that article. IMF and the U.S. condemn as a crooked b This symbol represents the time of day during the House proceedings, e.g., b 1407 is 2:07 p.m. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. H3367 H3368 CONGRESSIONAL RECORD Ð HOUSE May 19, 1998 brand of capitalism practiced by the Suharto Harvard's Mr. Radelet said the IMF's em- Jennings Randolph would be proud of regime, undermining its legitimacy and phasis on ending monopolies and closing gov- our every effort, Mr. Speaker, and suc- emboldening the opposition. ernment projects that are owned by friends cess this very day in freeing some of Whether the IMF, in the end, is seen as a and family of Mr. Suharto didn't address the collected motorists' gas taxes and villain that provoked widespread suffering or some fundamental economic problems. For a catalyst for constructive change depends months, for instance, the fund did little to spending them on transportation largely on what happens in Indonesia over help restructure Indonesian companies' huge needs. Yes, J.R., we will one day re- the coming weeks and months. foreign debt, which prevents them from get- store trust to our Highway Trust IMF critics, led by outspoken Harvard Uni- ting the added financing needed to run their Funds. versity economist Jeffrey Sachs whose Har- businesses and from taking advantage of a I would like to tell my colleagues a vard institute has long been an adviser to In- weak currency to increase exports. little something about the Senator's donesia, have been warning for months that The IMF has until early June to decide lifelong public service, that we have the U.S.-backed IMF prescription was harsh whether to disburse another $1 billion to In- seen little written about of recent date. and counterproductive. ``The IMF program donesia, as part of a $43 billion bailout pack- Having traveled so often with the Sen- was really badly designed and made a bad age it cobbled together for the nation. Indo- situation worse,'' says Steven Radelet, a nesian authorities have said they plan to roll ator, many times late at night in a Sachs colleague. back some of the price increases that very small plane, two or four-passenger Malaysian Prime Minister Mahathir sparked riots. But that by itself isn't ex- plane, sometimes through very stormy Mohamad also blames the IMF for worsening pected to put the IMF's added lending in weather, the first comment the Sen- Indonesia's problems. ``The IMF is not sen- jeopardy. ator would make upon landing was sitive to the social cost of economic restruc- f ``Where is the telephone?''. I would be turing,'' he said, according to Malaysia's of- TRIBUTE TO THE HONORABLE thinking of other places to visit but ficial news agency. the Senator was always wanting to But the Indonesian government hurt itself, JENNINGS RANDOLPH keep in touch with the people. too. It backtracked on pledges it made pub- The SPEAKER pro tempore (Mr. licly to the IMF, undermining the confidence Senator Randolph was known for his PETRI). Under the Speaker's announced of both domestic and foreign investors. It devotion to people and his compassion vowed to dismantle unpopular arrangements policy of January 21, 1997, the gen- for all people in need. He coauthored that enriched Suharto cronies, but then re- tleman from West Virginia (Mr. RA- the Randolph-Shepherd Act for the built them under different names. And, at a HALL) is recognized during morning Blind, giving blind persons the oppor- pivotal moment, it flirted with a controver- hour debates for 4 minutes. tunity and the right to be employed sial currency-board approach to monetary Mr. RAHALL. Mr. Speaker, on May 8 and have the dignity of a paycheck. policy. After a parade of international lead- this year, the Nation lost a great man, The blind are still benefiting from that ers pressured Indonesia to live up to its a former U.S.