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IMF has no objection to

delay in Indonesian

fuel price hike: minister

JAKARTA: The International Monetary Fund (IMF) had no objection to Indonesia delaying on the deliver of a promise to lift fuel subsidies, senior Economic Minister Kwik Kian Gie said on Saturday.

Indonesian President Abdurrahman Wahid announced on Friday, the eve of a planned 12 percent average fuel price rise, that it had been delayed because people were not ready to accept it.

Mass demonstrations had been planned for Saturday over the increase and other issues. "This (delay) has already been consulted with the IMF and it turns out the IMF did not react," Kwik said before attending a cabinet meeting at the presidential office.

"No reaction means no objection," he added.

The lifting of costly state subsidies on fuel prices was one of the measures promised by the government in a letter of intent to the IMF signed in January.

Wahid deferred the increase after students and non-governmental organisations said they planned to mobilise thousands of people to hold street protests on Saturday over the price hike.

Jakarta placed 16,000 police on top alert Kwik said that although Wahid said the postponement was for an indefinite time, a deadline needed to be set.

"If after three months the fuel prices are still not raised, that would be disastrous, meaning that the development expenditure will be cut, damaged bridges will remain unrepaired and bad roads full of potholes will also not be repaired," he said.

Wahid on Friday said that the government would review the situation weekly to see when the time was right the for increase to go ahead.

The government was going ahead with planned rises in the price of electricity, which has also been heavily subsidised, and the price of public transport.ÑAPP