IMF mission to come after review on central bank law<\/p>\n
JAKARTA (JP): The International Monetary Fund (IMF) said on
\nTuesday it would send its mission to Jakarta to review the
\ndisbursement of its stalled loan to Indonesia after a panel of
\nexperts completed reviewing the government's controversial
\nproposal to amend the central bank law.<\/p>\n
IMF Jakarta representative John Dodsworth said that the panel
\nwas expected to finish its week-long review on Sunday.<\/p>\n
\"It (the IMF visit) will be after the panel (completes its
\nwork) ... But no date has been set yet,\" Dodsworth told
\nreporters, following a meeting with the panel and Coordinating
\nMinister for the Economy Rizal Ramli.<\/p>\n
Dodsworth earlier hoped that the long-awaited IMF mission
\ncould make the visit sometime this month after the Fund made
\nprogress in resolving differences with the government over the
\neconomic reform program.<\/p>\n
The central bank law issue is the only remaining stumbling
\nblock between the Fund and the government.<\/p>\n
The IMF halted the disbursement of its latest US$400 million
\nloan tranche to Indonesia in December partly due to disagreement
\nwith the government over amendments to the proposed central bank
\nlaw.<\/p>\n
The delay in the IMF loan has badly affected investor
\nconfidence in the economy with the rupiah falling to a 30-month
\nlow last month and prompted Indonesia's traditional donors to
\nissue strong warnings to the government about reducing their
\nbadly-needed financial support to the country.<\/p>\n
The Paris Club of creditor nations has also threatened to
\ncancel the rescheduling of the country's $5.8 billion sovereign
\ndebt, due between March 2000 and March 2002, if the IMF program
\nwas not in place.<\/p>\n
The visit of the IMF mission would help revive confidence in
\nthe economy as it would bring the country much closer to
\nretrieving the Fund's crucial support.<\/p>\n
The government proposed to the legislature, in November last
\nyear, a bill to amend the current central bank law in a bid to
\nhelp boost the accountability of Bank Indonesia, which has been
\nplagued by massive corruption in the past.<\/p>\n
But the IMF has expressed concern that the amendment would
\njeopardize the independence of Bank Indonesia.<\/p>\n
The panel of experts is a result of government compromise with
\nthe IMF in February. The member of the panel includes the
\nGovernor of New Zealand Reserves Bank, Don Brash, former Chilean
\ncentral bank governor Robert Zahler, former Bank Indonesia
\ndirector Boediono, and local banking law expert Sutan Remi
\nSyahdeni.<\/p>\n
The panel began its work on Tuesday. After meeting with Rizal,
\nthe panel met with several members of the House of
\nRepresentatives special team on the amendment of the central bank
\nlaw.<\/p>\n
Panel members declined to comment to reporters about the
\nmeeting. (rei)<\/p>",
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