IMF team to visit Jakarta on new LoI talks<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
A team of the International Monetary Fund (IMF) is scheduled
\nto arrive in Jakarta later this week for preliminary talks on the
\nupcoming letter of intent (LoI) with the government, the IMF said
\non Monday.<\/p>\n
\"The discussion with the (Indonesian) authorities for the
\nfourth review will center around the macroeconomic framework for
\n2002, a review of policy developments on the issue in the August
\nletter of intent and key economic and structural reforms for
\n2002,\" the IMF's senior resident representative in Indonesia,
\nDavid C. Nellor, was quoted as saying by Dow Jones wire service.<\/p>\n
While in Jakarta, the team will meet economics ministers, and
\nofficials of Bank Indonesia and the Indonesian Bank Restructuring
\nAgency (IBRA), he said.<\/p>\n
The IMF team's arrival will come at a time when the government
\nis scrambling to meet the targets it promised the fund in the
\nLol signed in August.<\/p>\n
They include privatization proceeds of Rp 6.5 trillion (about
\nUS$596 million), of which none has been raised.<\/p>\n
The government's hopes of raising Rp 5 trillion from divesting
\nits shares in PT Semen Gresik may be dashed over locals opposing
\nthe sale.<\/p>\n
IBRA's asset sales target also appears at risk, with questions
\nlingering over the sale of PT Bank Central Asia (BCA) on time.<\/p>\n
Analyst have described the sale of BCA and Semen Gresik as a
\nlitmus test on Indonesia's ability to push ahead with
\nprivatization.<\/p>\n
Exacerbating this difficulty is the diminishing foreign
\ninvestors' appetite for Indonesian assets in the wake of the
\nSept. 11 terrorist attacks in the United States.<\/p>\n
Last year, the IMF withheld a $400 million loan tranche to
\nIndonesia on signs of the country faltering on targets, including
\nBCA's sale.<\/p>\n
Proceeds from IBRA's asset sales and privatization is expected
\nto help cover this year's state budget deficit of some Rp 51
\ntrillion.<\/p>\n
Other LoI targets at risk include performance in the monetary
\nsector, which is feeling the brunt of the global downturn.<\/p>\n
The LoI targets are already downgraded versions of the
\noriginal ones under the LoI signed in September last year.<\/p>\n
The revisions followed nearly seven months of political
\nturmoil preceding president Abdurrahman Wahid's ouster, which had
\ncrippled effective decision-making by the government.<\/p>\n
Nellor further said that the IMF team would also attend
\nWednesday's meeting of the Consultative Group on Indonesia (CGI).<\/p>\n
The CGI groups together Indonesia's major donors, and their
\nmeeting in Jakarta will discuss ways for further loan support.<\/p>",
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