IMF agrees to disburse another $365 million to RI<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The International Monetary Fund (IMF) has agreed to disburse its
\nlatest loan tranche to Indonesia, in what the government claims
\nas a vote of confidence in the country's economy despite the
\nadverse impacts of the Oct. 12 Bali bombings.<\/p>\n
The approval of the loan, amounting to around US$365 million,
\nwas reached following a meeting of the IMF's board of directors
\nto review the country's seventh letter of intent (LoI) to the
\nFund, which was submitted to Washington on Nov. 20, a press
\nrelease said.<\/p>\n
The seventh LoI refers to the government's quarterly report to
\nthe IMF over progress made in meeting a set of promised economic
\nreform targets.<\/p>\n
With the disbursement of the fresh loan, the IMF has channeled
\na total of about $3 billion, out of a total loan package worth $5
\nbillion agreed to between the government and the IMF in early
\n2000.<\/p>\n
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
\nJakti hailed the IMF decision as a reflection of the Fund's
\nconfidence in the progress of the country in carrying out its
\neconomic reform program.<\/p>\n
\"Indonesia's macro-economic improvement which is based on
\nfiscal consolidation and monetary stability has produced economic
\ngrowth, a more controlled inflation and improvement in the state
\nof the balance of payment,\" he said in the press release.<\/p>\n
The progress, he added, was made even after the economy was
\nhurt by the devastating terrorist bomb attack on Bali, which had
\nworsened the country's investment climate on which several LoI
\ntargets relied on.<\/p>\n
The LoI outlines the country's economic reform program and
\ncontains time bound targets which the government must meet in
\nreturn for a quarterly disbursement of the IMF loan.<\/p>\n
On Fiscal and monetary policy, as stated in the last LoI, all
\nJune to September quantitative performance criteria and
\nindicative targets were met, with fiscal policy being on track
\nwith a deficit target of 2.5 percent of gross domestic product
\n(GDP).<\/p>\n
Progress has also been made on the divestment program, under
\nwhich the government has completed the sale of shares in Bank
\nNiaga.<\/p>\n
The legal merger of five banks under IBRA was completed in
\nOctober with an operational merger to follow suit this month.<\/p>\n
However, there are also a number of unfinished reform targets,
\nwhich should have been completed by September.<\/p>\n
One of those is the delayed burden sharing deal between the
\nfinance ministry and Bank Indonesia over some Rp 138.4 trillion
\n(about $15 billion) in liquidity support loans channeled to
\ntroubled banks during the late 1990s financial crisis.<\/p>\n
Another is the delayed creation of an anti-corruption
\ncommission, which should have been set up by June.<\/p>\n
Elsewhere, Dorodjatun said that the immediate challenges for
\nthe country now was to take advantage of the above positive
\nmomentum to boost investment and revive the real sector to help
\ncreate more employment to jobless Indonesians.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/imf-agrees-to-disburse-another-365-million-to-ri-1447893297",
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"sponsor": "Okusi Associates",
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