IMF to send its mission to Jakarta this week<\/p>\n
WASHINGTON (Reuters): The International Monetary Fund said on
\nMonday it will send a high level mission to Jakarta this week,
\nthe first move toward ending a six-month deadlock over a US$5
\nbillion loan program.<\/p>\n
\"The International Monetary Fund will send a review mission to
\nJakarta later this week to discuss the third review under the $5
\nbillion (loan) program,\" IMF spokesman Vasuki Shastry said in a
\nbrief statement.<\/p>\n
\"The mission will seek to develop a letter of intent that
\ncarries forward the economic program,\" he added.<\/p>\n
In a related development, Indonesian President Abdurrahman
\nWahid criticized the IMF over its objections to central bank law
\nrevisions on Tuesday, ahead of a key IMF visit to Jakarta, saying
\nthe IMF should not get involved in microeconomic issues.<\/p>\n
Abdurrahman told state-owned TVRI interviewers in Jakarta
\nthe IMF was \"too rigid\" in its response to the proposed central
\nbank law changes.<\/p>\n
The central bank law revisions have become the most
\ncontentious issue between Indonesia and the Fund and will be the
\nkey to ending the six-month stalemate.<\/p>\n
The IMF's strongest objection relates to Article 75 which
\nstipulates the entire central bank board be replaced when the new
\nlaws come into effect.<\/p>\n
Wahid added the Fund should keep not get involved in
\nmicroeconomic issues.<\/p>\n
\"Let business circles decide on the microeconomy,\" he said.<\/p>\n
Earlier, Indonesian chief economics minister Burhanuddin
\nAbdullah said he believed the mission would arrive on Thursday.<\/p>\n
The IMF team will pave the way for a $400 million loan delayed
\nsince December -- more critical to show foreign investors
\nIndonesia's economic reforms are back on track than for
\nbolstering the country's reserves.<\/p>\n
Donors would also be heartened by the move and the World Bank
\nhas said it could more than double its annual aid program to $1
\nbillion if the impasse was broken.<\/p>\n
The team of around 10 officials would be led by IMF Asia-
\nPacific deputy director Anoop Singh, and follows indications
\nIndonesia will revise central bank law amendments -- the issue
\nwhich drove relations between the two to rock bottom.<\/p>\n
The contentious issue is Article 75 which stipulates the
\nentire bank board be replaced when the new laws come into effect.<\/p>\n
The Fund believes such a clause would threaten the bank's
\nhard-won independence. An independent report in April also said
\nthe article was a \"serious mistake.\"<\/p>\n
Minister Abdullah has said Jakarta would be willing to revise
\nthe amendments and might delay a parliamentary debate on the
\nchanges.<\/p>\n
IMF senior representative in Jakarta John Dodsworth said
\nIndonesia's recent efforts on the central bank law reforms were
\nlikely to appease the IMF executive.<\/p>\n
\"Basically he (Abdullah) has offered, from the government's
\nside, a compromise that should be acceptable,\" he said.<\/p>\n
The Fund's last mission to Jakarta in April ended on a sober
\nnote and with a warning the budget deficit could blow out to six
\npercent of GDP and that the country's economic recovery was at
\nrisk.<\/p>\n
But Indonesia has since made inroads on its 2001 budget which
\nit recently revised, keeping the deficit at 3.7 percent of GDP.<\/p>\n
Dodsworth also said the Fund was not overly concerned by a
\ndelay in the strategic stake sale of the country's largest retail
\nbank, Bank Central Asia (BCA).<\/p>\n
Indonesia's broken promise to sell a stake in BCA by December
\nlast year was partly the reason the IMF withheld the $400 million
\nloan.<\/p>\n
\"They've gone through to the point of getting bids and I
\nexpect there will be an announcement on those bids soon,\" he
\nsaid.<\/p>\n
Indonesia's bank restructuring agency (IBRA), which owns 70.3
\npercent of BCA, said on Friday it needed more time to evaluate
\nbids for the maximum 30 percent stake sale.<\/p>\n
The powerful agency was to have announced the winning bid last
\nweek as part of efforts to raise desperately needed cash and to
\nre-energize the government's sluggish privatization program.
\nFive bidders have been shortlisted for the stake.<\/p>\n
In addition to the up to 30 percent stake sale, BCA said on
\nMonday it was offering a 10 percent stake at 900 rupiah per share
\nto the public from July 4-6.<\/p>",
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