IMF holding out for RI progress on reform<\/p>\n
SEOUL (Dow Jones): The International Monetary Fund (IMF) said
\nhere on Friday that the need for further evidence of reform
\nprogress will far outweigh scheduling concerns in determining
\nwhen Indonesia will receive its next loan installment.<\/p>\n
\"That's the basic issue, it's not just a calendar issue,\" IMF
\nAsia Pacific Director Yusuke Horiguchi said.<\/p>\n
The IMF, he added, needs to see more progress in Indonesia's
\neconomic reform efforts before it releases the country's next
\nscheduled loan tranche.<\/p>\n
In Jakarta, House of Representatives Speaker Akbar Tandjung
\nmade another attack on the President's economic team, pointing
\nout that the Cabinet utterly lacked an economic vision.<\/p>\n
\"Though the government has gained political support
\ndomestically and internationally, its economic team is very weak,
\nas can be seen from the persistently sick economy,\" Akbar noted
\nat the closing of the House's first quarter-session period on
\nFriday.<\/p>\n
He blamed the Cabinet for failing to implement reform programs
\nwhich prompted the International Monetary Fund to delay the
\nsecond disbursement of its loan to Indonesia for more than six
\nweeks.<\/p>\n
\"The IMF is very important for us because it strongly
\ninfluences other creditors such as the World Bank and other
\nmultilateral financial agencies,\" he added.<\/p>\n
Akbar lambasted at the government for its extreme lack of
\nsense of crisis and urgency, as can be noted from its decision to
\nthe grant high officials very generous perks.<\/p>\n
In an interview with Dow Jones Newswires in Seoul, Horiguchi
\nsaid that the fund's executive board is unlikely to meet to
\ndiscuss the next loan disbursement to Indonesia before mid-April.<\/p>\n
He noted that the fund's policy-making International Monetary
\nand Financial Committee, formerly known as the Interim Committee,
\nis scheduled to meet in mid-April, which will make it
\nlogistically difficult for the executive board to address
\nindividual country matters before then.<\/p>\n
Horiguchi is in Seoul to attend the APEC Forum on Shared
\nProsperity and Harmony.<\/p>\n
As part of the IMF's US$5 billion loan agreement for
\nIndonesia, the fund's executive board had been expected to hold
\nits next bimonthly Indonesian review on April 4 to release the
\nnext scheduled $400 million loan tranche.<\/p>\n
Horiguchi downplayed the importance of the expected delay.<\/p>\n
\"Some people are viewing April 4 as seeming like something of
\nan important date,\" he said, adding that such target dates should
\nbe viewed as broad milestones instead.<\/p>\n
\"Having said that, the program implementation has been perhaps
\nsomewhat sluggish relative to what we wanted to see done,\"
\nHoriguchi said.<\/p>\n
The IMF wants to see further progress in Indonesian corporate
\ndebt restructuring, Horiguchi said, noting that \"progress has not
\nbeen all great.\"<\/p>\n
The IMF official added that \"given the complicated nature of
\nthe problem, it's not going to be fast.\"<\/p>\n
He said the fund is also concerned about the weakness of the
\ncountry's judicial system.<\/p>\n
\"Unless the court system works, it's very difficult to make
\nrecalcitrant big debtors to behave according to the law,\" he
\nsaid.<\/p>\n
Thanks to surging oil exports, Indonesia has recently
\nexperienced an increase in its foreign-exchange reserves. But
\nHoriguchi said he wasn't worried that the country's improving
\nexternal position could potentially undermine the government's
\ncommitment to its reform program.<\/p>\n
\"Even if Indonesia is financially comfortable in terms of
\nreserves or oil revenue, I think the markets will treat the lack
\nof implementation rather severely,\" he said. \"There's always that
\nleverage.\"<\/p>\n
Horiguchi said he was pleased by Indonesian Senior Economics
\nMinister Kwik Kian Gie's pledge Wednesday to accelerate
\nimplementation of certain key economic reforms.<\/p>\n
\"I'm encouraged by Mr. Kwik's statement that they are willing
\nto make a major advance,\" he said. \"That's what it takes -
\nauthorities' willingness to cooperate.\" (jun)<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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