IMF to consider extending RI program<\/p>\n
Berni K. Moestafa and Tantri Yuliandini, The Jakarta Post, Jakarta<\/p>\n
The International Monetary Fund (IMF) said on Friday it would
\nconsider extending its contract with the government, citing that
\na one year extension of the contract could possibly be
\nappropriate.<\/p>\n
The delegation head of a visiting IMF team in Jakarta said he
\nwould recommend to the Fund's executive and management boards to
\ncontinue its financial aid program to Indonesia after the current
\none agreement expired in December 2002.<\/p>\n
"A one year extension is what the government wants, and we
\nbelieve that it is appropriate," said the IMF's Asia Pacific
\nDepartment senior advisor Daniel Citrin, who is leading the IMF
\nmission to Jakarta<\/p>\n
The government said it needed an IMF contract extension to
\nsecure crucial debt rescheduling deals with foreign creditors.<\/p>\n
The Paris Club of creditor nations requires that Indonesia
\ncomply with the IMF's reform program as part of any debt
\nrescheduling deal.<\/p>\n
Between 2002 and 2004, the government hopes to reschedule some
\nUS$6 billion in debts in a bid to help ease the pressure on
\nfuture state budgets. Failure to obtain the rescheduling facility
\ncould have serious consequences for the sustainability of state
\nbudgets in coming years.<\/p>\n
Much of the debt rescheduling would come from the Paris Club,
\nwhich will meet for the third time in February 2002 in Paris.<\/p>\n
By then, the government said, it would have to have obtained
\nan IMF contract extension of at least one year.<\/p>\n
But Citrin did not indicate when an IMF decision was be taken,
\nsaying there was no specific timetable.<\/p>\n
"It's for the management and board to decide," he told
\nreporters after meeting Coordinating Minister for the Economy
\nDorodjatun Kuntjoro-Jakti.<\/p>\n
Citrin arrived in Jakarta last week to participate in a
\nmeeting of Indonesia's creditors assembled in the Consultative
\nGroup on Indonesia (CGI).<\/p>\n
Last week, the group approved $3.14 billion in new loans for
\nIndonesia to help bridge its state budget deficit next year.<\/p>\n
Together with the Paris Club, the CGI is a vital financing
\nsource for helping to plug the gap in the state budget.<\/p>\n
Under the IMF's current three year program, Indonesia has been
\ngiven the right to draw upon $5 billion in loans.<\/p>\n
Of this, the government has so far accessed only $1.2 billion.<\/p>\n
Citrin's team is in Jakarta to review the progress made in
\nmeeting economic targets under the LoI, the third since last
\nyear.<\/p>\n
Separately, economist Mohamad Ikhsan agreed that an extension
\nof the IMF contract was "the only way to go" for Indonesia ahead
\nof the third Paris Club meeting<\/p>\n
Beggars can't be choosers, he said, adding that the IMF had so
\nfar been able to keep the economic recovery on track.<\/p>\n
According to him, without the IMF's LoI, people with vested
\ninterests would lead the country to further economic ruin.<\/p>\n
Elsewhere, legislators urged the government to consult with
\nthem before extending the contract with the IMF.<\/p>\n
Paskah Suzetta, a legislator from the House of
\nRepresentatives' Commission IX for financial and development
\nplanning, said he would call a meeting with the government to
\nclarify the plan as soon as the House began business again on
\nNov. 20 after its recess.<\/p>\n
He said the government should first consult with the House on
\nany crucial decisions regarding the country's economy and the
\nwell-being of the people.<\/p>\n
Also from Commission IX, legislator Faisal Baasir said that a
\nconsultative meeting was needed to avoid future misunderstandings
\nbetween the government and the House.<\/p>\n
"The House has been condemned on many occasions for
\nobstructing the government when, in fact, the government simply
\ndid not consult with us regarding its plans," he told The Jakarta
\nPost.<\/p>\n
The legislators agreed that an extension of the contract with
\nthe IMF was "unavoidable". "There's no other way, we have no
\nother alternative," said Paskah.<\/p>\n
Faisal warned that the new LoI should not impinge upon the
\ncountry's sovereignty, and should help stimulate economic growth.<\/p>",
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