Govt, IMF agree to slow down BRI loan divestment<\/p>\n
JAKARTA (JP): The government and the International Monetary
\nFund (IMF) have reached an agreement not to force state-owned
\nBank Rakyat Indonesia (BRI) to divest all its corporate loans by
\nthe end of this year as originally scheduled, a senior government
\nofficial said on Monday.<\/p>\n
Dipo Alam, assistant to the coordinating minister for the
\neconomy, said the corporate loan transfer would be made
\ngradually.<\/p>\n
\"We can't force BRI to divest its corporate loans to zero
\npercent by the end of this year,\" he said following a technical
\nreview meeting with the IMF.<\/p>\n
Dipo said a \"compromise solution\" had been reached, but he
\ndeclined to disclose the new target for the corporate loan
\ntransfer.<\/p>\n
He said the solution would consider the bank's abilities
\naccording to its business plan.<\/p>\n
In the last letter of intent to the IMF, the government agreed
\nto divest all of BRI's corporate loans, currently at 20 percent
\nor equal to Rp 6.2 trillion, by the end of this year to allow the
\nbank to focus on financing the agriculture sector and small and
\nmedium-scale businesses.<\/p>\n
But the new policy was opposed by the bank. Minister of
\nFinance Prijadi Praptosuhardjo also said it was impossible for
\nBRI to meet the corporate loan transfer target as set by the IMF.<\/p>\n
According to BRI's business plan, the bank will divest its
\ncorporate loans from 20 percent this year to 18 percent by the
\nend of next year, and 17 percent in 2002. It is not clear when
\nthe bank will finish selling its corporate loans.<\/p>\n
Analysts have said forcing the bank to transfer all of its
\ncorporate loans would badly hurt its financial performance
\nbecause BRI had obtained lucrative profit from the business.<\/p>\n
A group of government senior officials have been engaged in a
\ntechnical meeting with the IMF officials since last week to
\nreview the country's economic reform program set out in the
\nletter of intent. The technical meeting is scheduled to end on
\nTuesday.<\/p>\n
The meeting will be followed by a review meeting involving
\nsenior economic ministers, which will set up a new letter of
\nintent.<\/p>\n
The IMF is expected to disburse another tranche of its loan to
\nthe country next month after approving the country's new letter.<\/p>\n
The IMF is providing the current administration with some US$5
\nbillion in bailout funds to help finance the country's three-year
\neconomic program. So far, the fund has disbursed about $1
\nbillion.<\/p>\n
The government had made delays in the past in implementing its
\nkey economic program agreed with the IMF, forcing the latter to
\npostpone its loan disbursement. The delay in the IMF loan
\ndisbursement has hurt confidence in the country.<\/p>\n
Dipo said the new letter of intent would only disclose a
\n\"schedule and figures\" to be achieved by the government.<\/p>\n
He said the letter would no longer contain details of the
\ncountry's economic programs. (rei)<\/p>",
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