ADB poverty loan not linked to IMF program: Official<\/p>\n
JAKARTA (JP): Asian Development Bank (ADB) Indonesia
\nrepresentative Jan Van Heeswijk said on Wednesday that its loan
\nfor poverty reduction would not be linked to the International
\nMonetary Fund (IMF) reform program.<\/p>\n
But Heeswijk said that the Manila-based multilateral
\ninstitution's loan for lending for policy reforms would be
\ndisbursed only if the Indonesian government is committed to
\nreform agenda agreed with the IMF<\/p>\n
\"If there would be delay in the reforms in the financial and
\nmacroeconomic sectors, it will be difficult for us to proceed
\nwith lending for policy reforms. But our lending for projects
\ndirectly focused at poverty would continue,\" he told reporters on
\nthe sidelines of a workshop.<\/p>\n
The IMF delayed late last year the disbursement of its next
\nUS$400 million loan tranche to the country due to the government
\nslow progress in the implementation of key reform program
\nparticularly in the sale of government shares in Bank Central
\nAsia and Bank Niaga, and concern over the poor implementation of
\nnew regional autonomy law and the government-proposed amendment
\nof the central bank law.<\/p>\n
The delay in the IMF loan has prompted both the World Bank and
\nADB to issue a stricter conditions for the disbursement of their
\nloans to Indonesia.<\/p>\n
A significant reduction in lending from the two institutions
\nwould seriously harm the country's state budget.<\/p>\n
ADB said last week in its new \"country operational strategy\"
\nfor Indonesia that it was prepared to lend Indonesia between
\nUS$600 million and $1.2 billion a year over the next three years,
\nprovided the government pressed ahead with key reforms.<\/p>\n
The bank, however, did not give details on the specific
\ncriteria it was setting up for Indonesia nor did it say to what
\nextent it would cut loans if they were not met.<\/p>\n
The country borrowed about $1.2 billion from ADB annually
\nbefore the economic crisis started in middle of 1997. During the
\ncrisis, lending commitments increased to $1.8 billion in 1998 and
\n$1.5 billion in 1999.<\/p>\n
Elsewhere, Heeswijk expected the IMF to disburse its loan soon
\nas there had been a \"narrowing of position\" between the IMF and
\nthe government over reform program.<\/p>\n
\"We would hope so, there has been a narrowing positions as I
\nunderstood,\" he said.<\/p>\n
But he declined to speculate when the Fund would disburse its
\nloan.<\/p>\n
The government recently agreed to the IMF demand to set up a
\npanel of international and domestic experts to provide input and
\nreview the government proposed amendment of the central bank law.<\/p>\n
The IMF has expressed concern that the amendment of the
\ncentral bank law would do harm to the independency of Bank
\nIndonesia in implementing monetary policy.<\/p>\n
The government has also recently obtained approval from the
\nHouse of Representatives to sell its majority ownership in BCA
\nand Bank Niaga in the first semester of this year.<\/p>\n
The sale program was supposed to be completed last year, but
\nit was delayed due to bad market condition at the time.<\/p>\n
Over the issue of fiscal decentralization policy, the
\ngovernment is expected to issue a decree banning regional
\nadministration from making borrowing in the near future to
\nfinance their new autonomy power.<\/p>\n
Some government officials have said that the IMF was expected
\nto release the loan sometime in late April.<\/p>\n
Heeswijk also said that Jakarta representatives of Indonesia's
\nmajor donors grouped in the so-called Consultative Group on
\nIndonesia (CGI) were expected to convene late in April.<\/p>\n
ADB is a member of the CGI, which is coordinated by the World
\nBank.<\/p>\n
Heeswijk said that the final CGI meeting is expected to take
\nplace in October of November.<\/p>\n
But he said that it was not yet decided whether the CGI
\nmeeting would take place in Jakarta or other country. (rei)<\/p>",
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