INDONESIA URGED TO DEREGULATE ITS ECONOMY World Bank President Barber Conable linked increased borrowing by Indonesia, the Third World's sixth largest debtor, to fresh measures to deregulate trade and dismantle protectionist barriers. "We would like to see the Indonesian government continue the adjustment process ... To move towards increased deregulation of the economy," Conable told a press conference at the end of a three-day visit to Jakarta. Conable directly linked further Bank help for Indonesia's hard-pressed balance of payments to further measures by the government to reduce protectionism and increase efficiency. The World Bank last month granted Indonesia a 300 mln dlr trade adjustment loan. He said further loans would depend on the economic policies Indonesia adopted. But he said that in meetings with both President Suharto and leading Indonesian ministers he had not called for specific policy changes. "The initiative will have to rest with the Indonesian government. We are not here to dictate to them," he stated. Indonesia, the only Asian member of Opec, has been badly hit by last year's slump in oil prices which cut its revenues from crude exports in half. Conable had what he termed a frank meeting this morning with Suharto. He voiced support for measures already taken, including September's 31 pct devaluation of the rupiah, and efforts to deregulate imports and stimulate exports. "The government can rely on the support of the World Bank in a continuing program of adjustment to the economic realities of today's world," he said. The Bank has loaned Indonesia 10.7 billion dlrs over the past 20 years. Lending is now about one billion a year. The World Bank would probably like to see further dismantling of tarrif barriers and measures to reduce Indonesia's protected monopolies in areas like steel, plastics and cement, western bankers and diplomats said. The government has already said it will announce further deregulation measures, but has given no timetable. It is also considering selling off loss-making state companies. Conable said the Bank would try to help Indonesia find funds to cover its share of development projects, which otherwise would have to be scrapped or postponed. Japan's Ex-Im bank announced a 900 mln dlr untied credit last month.