Corruption threatens Indonesia’s economic rise: IMF

JAKARTA, September 17, 2010 (AFP) – The International Monetary Fund warned Friday Indonesia must make fighting corruption a priority if it wants to build on its progress as one of the world’s best-performing economies. Southeast Asia’s biggest economy expanded 4.5 percent in 2009, the third fastest in the Group of 20, and is poised for accelerated growth in the years ahead, the IMF said in an annual report.

But it said foreign investors who are needed to fund Indonesia’s expansion into a regional powerhouse would be cautious until more is done to fight rampant corruption and improve the rule of law.

“A decisive and successful response, as well as a decade of sound policies and structural reform, helped Indonesia recover quickly from the 2008 global crisis,” the report said.

“However, lingering concerns over weak enforcement of the rule of law, transparency, and governance issues weigh on market perceptions. Addressing these weaknesses should be a priority.”

The IMF praised Indonesia’s “remarkable achievements” over the past decade, as it transformed from the Suharto dictatorship into a flourishing democracy and recovered from near-bankruptcy in the 1998-1999 Asian financial crisis.

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