IMF, Indonesia reach agreement on fourth LoI<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The government reached an agreement on Tuesday with the
\nvisiting International Monetary Fund (IMF) team over the economic
\nreform policies to be implemented next year, a statement said.<\/p>\n
IMF senior adviser for Asia Pacific Daniel Citrin said in the
\nstatement that the letter of intent (LoI) would be presented to
\nIMF management in Washington for approval.<\/p>\n
\"Assuming nothing goes wrong, we hope to have a board meeting
\nat the end of December or early January,\" Citrin told reporters
\non Wednesday.<\/p>\n
The approval of the fourth LoI, which basically sets out the
\neconomic targets and reform programs that the government must
\nachieve and implement, will pave the way for the disbursement by
\nthe IMF of the next US$360 million loan tranche to the country.<\/p>\n
The government had earlier said it expected the next
\ndisbursement to take place sometime at the end of this year. The
\nloan is part of a $5 billion aid package promised by the IMF late
\nin 1999. So far the Fund has disbursed around $1.2 billion.<\/p>\n
The IMF special mission has been engaged in intense
\ndiscussions with the government over the past two weeks to review
\nthe country's latest economic situation and the progress of the
\nreform programs, as well as to draft the fourth LoI.<\/p>\n
Meanwhile, the LoI agreement failed to cheer the financial
\nmarkets.<\/p>\n
The rupiah closed at Rp 10,535 against the U.S. dollar,
\nunchanged from its close the day before.<\/p>\n
Apart from saying that the deal was expected, dealers also
\nargued that there were no guarantees the government would keep
\nits promises under the reform program.<\/p>\n
The IMF said that it would not disclose the contents of the
\nLoI until its management had completed reviewing the document.<\/p>\n
The statement, however, said that the IMF required measures to
\nbe taken in some areas as part of the effort to establish a sound
\nfoundation for the country's economic recovery.<\/p>\n
The Fund maintains that the restoration of the private sector
\nis central to any sustainable recovery.<\/p>\n
\"In this respect, reform of the banking system, corporate
\nrestructuring, privatizing state-owned enterprises as well as
\nintensifying reform efforts in the justice system are essential,\"
\nit said.<\/p>\n
\"The IMF mission believes that strong endeavors in
\nimplementing these reforms will restore confidence in the
\ngovernment reform program and sustain the country's economic
\nrecovery in the period ahead.\"<\/p>\n
According to a draft of the deal obtained by Reuters last
\nweek, the two sides have targeted economic growth of between 3
\npercent and 4 percent next year and inflation of between 9
\npercent and 10 percent by the end of 2002.<\/p>\n
Elsewhere, the IMF also said that it would send a request to
\nWashington from the government of Indonesia to extend the current
\nloan program into 2003. The program is supposed to expire in
\nDecember of next year.<\/p>\n
The government has said that the extension of the IMF program
\nis crucial if Indonesia is to obtain a rescheduling from the
\nParis Club of creditor nations in respect of some $6 billion in
\nsovereign debt due to mature in 2002-2004.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/imf-indonesia-reach-agreement-on-fourth-loi-1447893297",
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"sponsor": "Okusi Associates",
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