Govt to complete key talks with IMF today<\/p>\n
Dadan Wijaksana and Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
After weeks of intense discussion, the government and the
\nvisiting International Monetary Fund (IMF) mission team are
\nexpected to complete the assessment of the country's economic
\ncondition and reform programs on Tuesday.<\/p>\n
\"(The discussion) has been going well, but it's not finalized
\njust yet. We'll still have a chance to meet tomorrow, we'll wrap
\nit up all by then,\" Finance Minister Boediono told reporters late
\non Monday following a meeting between key economic ministers and
\nthe IMF team.<\/p>\n
He declined to provide further details.<\/p>\n
A special mission of the IMF, led by the Fund's senior adviser
\nfor the Asia Pacific department Daniel Citrin, has been in
\nJakarta for two weeks not only to review the country's latest
\neconomic condition, but also together with the government to
\ndraft Indonesia's fourth letter of intent (LoI).<\/p>\n
The LoI, in this case, is a set of economic targets and reform
\nprograms which must be achieved and implemented by the government
\nwithin a certain period of time to qualify for further loans
\nunder the IMF's structural adjustment program.<\/p>\n
The draft of the LoI will be brought to the IMF board of
\ndirectors in Washington for approval, which will pave the way for
\nthe disbursement of the Fund's next US$400 million loan tranche.<\/p>\n
The government expects the IMF to make the next loan
\ndisbursement later this year. The disbursement of the IMF money
\nis crucial to help revive investor confidence in the ailing
\neconomy.<\/p>\n
Indonesia has so far received around $1.2 billion out of the
\n$5 billion loan program agreed upon in late 1999.<\/p>\n
Meanwhile, State Minister of State Enterprises Laksamana
\nSukardi also confirmed the smooth process of the discussions,
\nsaying that so far there had been nothing that could lead to any
\ndisagreement.<\/p>\n
Among the economic targets set for the fourth LoI, according
\nto sources, were an economic growth target of 3-4 percent for
\n2002, inflation of 9-10 percent and Rp 42.5 trillion ($4 billion)
\nproceeds from the sale of assets under the Indonesian Bank
\nRestructuring Agency (IBRA).<\/p>\n
Earlier, a Bank Indonesia (BI) senior official said that one
\nimportant item to be included in the LoI was a plan to launch a
\nnew investigation into alleged misuse of some Rp 138.4 trillion
\nin BI emergency loans.<\/p>\n
The case centers around the central bank's liquidity support
\nto 48 local banks during the peak of the 1997 financial crisis.<\/p>\n
Although two separate investigations have been conducted in
\nthe case, they yielded neither prosecutions nor the repayment of
\nthe loans.<\/p>\n
Meanwhile, regional banking analyst Lin Che Wei at SG
\nSecurities warned the move might stir legal uncertainties for
\ndebtors under IBRA.<\/p>\n
\"The implications of this (probe) can spread everywhere,\" he
\ntold The Jakarta Post.<\/p>\n
Any follow-up on the probe will inevitably lead to reviewing
\nIBRA's Master of Settlement and Acquisition Agreements (MSAA) - a
\ndeal requiring bank owners to surrender assets to IBRA as
\ncollateral for their debts to the government.<\/p>\n
He said forcing debtors to transfer more assets despite the
\nMSAA, would hurt debtors' rights guaranteed in that document.<\/p>\n
Che Wei said the government should realize that the loan abuse
\ncase may not get resolved within a short time. It must also know
\nthe consequences if this were to become an item on the next LoI.<\/p>",
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