"The sell-off could produce a fire sale mentality among investors that would disrupt the stock market, unnerve management and fuel undesirable effects on the economy at a time when the IMF-led programme is just beginning to show prospects of success and receiving international fund support," the fund's Asia director Hubert Neiss has warned the Indonesians in a letter, according to the Wall Street Journal.

The Indonesian government, however, justifies its decision by saying that for stability in the country, it is necessary to redistribute wealth and the ministry represents 30 million members of local cooperatives and small businesses.

If it is not sold to cooperatives, the control will pass into the hands of the ethnic Chinese or foreigncapitalists, creating social tensions as the only other alternative is to sell the assets to individual capitalists or companies.

Pointing out that the rush of asset sales could reverse the strengthening of the rupiah and the slackening of inflation, Neiss has pleaded with president BJ Habibie, who wants the asset sales completed within a year, to show "flexibility."

In another major Asian country, Thailand, the journal reported that despite current gains, the obstacles to lasting growth still loom larger than the incipient signs of recovery.

Thailand's banking system still needs more than $20 billion to recapitalise itself. Money-losing enterprises have done little to restructure themselves.

Yet another key country with an IMF programme, Russia, has failed to achieve the required economic growth following the devaluation of the rouble against the dollar.

The chairman of Russia's central bank, Viktor Gerashchenko, told the media that Russia had abandoned hope of winning new financial aid this yearfrom the IMF.

An IMF team is in Moscow trying to decide whether to re-start stalled disburement of a $22.6-billion loan package.

However, first deputy prime minister Yuri Maslyukov said on Tuesday, according to Interfax, "The IMF will have to wait." Russia is still considering the still unpublished proposals which, the journal said, "are unlikely to please the IMF."

The Russian plan aims at supporting domestic industries. "Extraordinary steps toward government intervention in the economy are needed," said economic minister Andrei Shapovalyants.