The IMF is critical of the Indonesian’s government’s decentralization plans, which it believes could lead to excessive borrowing by regional governments. The government is in talks with the IMF to find ways to implement its new regional autonomy law. The IMF, apparently frustrated by the political situation and the slow pace of reforms, has withheld a loan installment of US$440m. Local media report that Indonesian President Abdurrahman Wahid said that the IMF “must learn the art of compromise”.
The IMF and the World Bank are increasingly engaged with the challenge of addressing how tax avoidance and evasion affect developing countries, but need to address the role played by multinational enterprises and tax havens in exacerbating inequality and undermining countries’ domestic revenues.
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