Boediono upbeat on meeting key IMF programs<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
Minister of Finance Boediono expressed optimism on Tuesday that
\nthe government would be able to meet a list of \"prior actions\"
\nset out by the International Monetary Fund (IMF) as prerequisites
\nfor maintaining the Fund's support.<\/p>\n
IMF officials are expected to arrive in Jakarta next month to
\nreview the country's economic reform program.<\/p>\n
Obtaining the IMF's support is crucial for the government to
\nland a favorable debt rescheduling scheme with the Paris Club of
\ncreditor nations in April.<\/p>\n
\"Prior actions are something the government must implement.
\nBut I'm convinced we'll be able to complete all that before too
\nlong,\" Boediono told reporters on the sidelines of a hearing with
\nHouse of Representatives commission IX on financial affairs.<\/p>\n
He did not elaborate on what the prior actions might be.<\/p>\n
However, he confirmed that a credible process in the sale of
\nthe government's 51 percent stake in Bank Central Asia (BCA), and
\na clear strategy on how to resolve the huge debts owed by ex-bank
\nowners to the government were included in the list.<\/p>\n
While the BCA sale process is nearing its conclusion, the
\ngovernment is still divided over a controversial policy to ease
\nthe repayment terms of the ex bank owners' debts.<\/p>\n
Many quarters have opposed the proposed debt settlement
\nscheme, which seems to favor the former bank owners.<\/p>\n
Besides these two, local media have quoted a source as saying
\nthat there were at least four more actions the government needed
\nto carry out.<\/p>\n
They are: the completion of a policy to allow fixed-rate bonds
\nin Bank Niaga to be replaced by bonds carrying a variable
\ninterest rate, dilution of the share ownership of Eka Cipta
\nWidjaja in his Bank Internasional Indonesia (BII), tax measures
\nand the amendment of the central bank law.<\/p>\n
Completing the prior actions is important to allow the
\ngovernment to secure a fresh deal with the IMF. The upcoming
\nvisit of the IMF team will not only review the ongoing reform
\nprogram but would also jointly draft with the government the
\ncountry's new letter of intent (LoI), which basically contains a
\nset of economic reform program targets to be implemented by the
\ngovernment.<\/p>\n
The government is to meet with the Paris Club of creditor
\nnations in April to secure a rescheduling facility for sovereign
\ndebt maturing between April this year and December next year.<\/p>\n
As in previous meetings, lending commitments from the
\ncreditors would come only after the IMF gave its consent to the
\ncountry.<\/p>\n
The Paris Club groups together the country's major sovereign
\ncreditors for talks on debt rescheduling. The April meeting would
\nbe its third.<\/p>\n
The restructuring facilities are seen as crucial, for without
\nthem, the country would face an uphill task in achieving the 2002
\nbudget deficit at a manageable 2.5 percent of the gross domestic
\nproduct (GDP).<\/p>\n
Debt relief would also provide the government a larger
\nallocation for development spending, to help accelerate economic
\ngrowth.<\/p>\n
As for the exact amount of restructuring facilities, Boediono
\nsaid the calculation was still underway and that he had yet to
\nreceive the final figure.<\/p>\n
His statement denied previous report by The Jakarta Post
\nquoting his aide Achmad Royadi as saying the government was
\nseeking US$5 billion worth of debt rescheduling.<\/p>\n
The government is currently shouldering a staggering $130
\nbillion in total debt, or around 90 percent of GDP, of which $70
\nbillion is external debt.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/boediono-upbeat-on-meeting-key-imf-programs-1447893297",
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"sponsor": "Okusi Associates",
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