IMF demands greater transparency at IBRA<\/p>\n
JAKARTA (JP): The International Monetary Fund (IMF) said on
\nWednesday that an independent body to oversee the Indonesian Bank
\nRestructuring Agency (IBRA) must be established in a bid to
\nensure transparency and restore public trust in the agency.<\/p>\n
IMF Indonesia representative John Dodsworth said on Wednesday
\nthat public trust was crucial for IBRA to succeed in
\nrestructuring the ailing economy.<\/p>\n
\"(IBRA) is important as a symbol for improved governance and
\ntransparency. If there is no trust in IBRA, then the economic
\nprogram as a whole is in jeopardy,\" Dodsworth told a seminar.<\/p>\n
He explained that the government needed to balance two
\nconflicting aims between an urgency in moving to sell assets and
\nrestructuring debts, but at the same time ensuring the integrity
\nof the process.<\/p>\n
\"There need to be effective checks and balances on IBRA's
\noperations to ensure that the taxpayer is the true beneficiary,
\nthat asset values are maximized and that the actions of IBRA are
\nnot perverted into serving narrow political or commercial
\ninterests,\" he said.<\/p>\n
\"A new oversight body is needed that combines political
\nsupport with independence of decisions and technical competency,\"
\nhe added.<\/p>\n
Dodsworth said that the oversight role played by the
\nInternational Review Committee (IRC), daily reporting to the
\nMinister of Finance, obtaining clearance from the Financial
\nSector Policy Committee (FSPC) on large transactions and
\nconsultations with President Abdurrahman Wahid on policy issues
\nwere insufficient.<\/p>\n
IBRA was created by the government in early 1998 to help
\nrestructure the country's ailing banking and corporate sector.
\nThe agency now controls over Rp 600 trillion worth of various
\nbanking assets surrendered by or taken from former bank owners
\nand businessmen.<\/p>\n
With the vast assets under its control, IBRA also plays an
\nimportant role in stimulating foreign investment and financing
\nthe state budget.<\/p>\n
The agency is targeted to raise some Rp 18.9 trillion in cash
\nin the 2000 budget year.<\/p>\n
But the large size of assets also opens the possibility for
\nabuse and corruption.<\/p>\n
IBRA was badly hit last year by the high profile Bank Bali
\nscandal which allegedly involved several senior government
\nofficials.<\/p>\n
There have also been reports of alleged misconduct by IBRA
\nofficials in the restructuring of assets.<\/p>\n
Dodsworth said that the government's privatization program was
\nalso an important source to help finance the state budget.<\/p>\n
He said that potential investors were looking for greater
\nclarity in the government's privatization objectives.<\/p>\n
\"What investors are looking for is management control (in
\nstate companies),\" he said.<\/p>\n
He said that although in some sectors the government might be
\nable to raise privatization proceeds without releasing majority
\ncontrol in state enterprises, in others it clearly was not
\ncapable of doing so.<\/p>\n
He said that another objective of the privatization program
\nwas to promote increased efficiency, partly with changes in
\nmanagement.<\/p>\n
The IMF is sponsoring the country's economic reform programs.
\nDodsworth said that the IMF's managing director Stanley Fischer
\nwas expected to come to Indonesia soon, followed by a team of
\nexperts to review the country's progress with the reform
\nmeasures.<\/p>\n
The IMF is expected to disburse a US$400 million bailout
\ntranche in May, depending on whether it approves the reform
\nprogress.<\/p>\n
Separately, Coordinating Minister for the Economy, Finance and
\nIndustry Kwik Kian Gie said after a Cabinet meeting on Wednesday
\nthat Indonesia was considering changing the $400 million IMF
\npayout to a standby loan.<\/p>\n
He said that the change would allow the government to draw on
\nthe loan only when needed.<\/p>\n
He said the standby loan would provide security for the
\ncountry's foreign exchange reserves.<\/p>\n
Kwik expressed optimism that the IMF would disburse the cash
\nin the middle of next month because the government had completed
\nalmost all of the reform programs agreed with the IMF in January.<\/p>\n
The IMF was supposed to disburse the loan earlier this month,
\nbut delayed it because the government failed to meet the end of
\nMarch deadline to complete the various economic reform measures.
\n(rei\/prb)<\/p>",
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