Mixed reactions greet IMF's loan disbursement<\/p>\n
JAKARTA (JP): Economists presented mixed reactions on Tuesday
\nto the International Monetary Fund (IMF)'s decision to release a
\nUS$400 million loan tranche to the country.<\/p>\n
Noted economist Umar Juoro said disbursement of the funds
\nshould help revive investor confidence in the economy, while at
\nthe same time opening the way for the Paris Club of creditor
\nnations to agree to the rescheduling of the country's $2.8
\nbillion in sovereign debt maturing this year and in 2002.<\/p>\n
\"Indonesia is now gaining momentum for further talks with
\nother lenders such as the Paris Club and the Consultative Group
\non Indonesia (CGI),\" Umar said.<\/p>\n
CGI groups Indonesia's traditional donor institutions.<\/p>\n
A special government team is currently negotiating with the
\nParis Club for formal approval for the debt rescheduling
\nfacility.<\/p>\n
The government is also planning to meet with the CGI donors in
\nNovember to request new loans that will help finance the 2002
\nstate budget.<\/p>\n
\"The result of that meeting will be crucial as the government
\nplans to use the loans to finance next year's state budget,\" Umar
\nsaid.<\/p>\n
Umar warned, however, that the government was still facing
\nseveral \"technical problems\", including obtaining approval from
\nthe House of Representatives over plans to divest a 51 percent
\nstake in the publicly listed Bank Central Asia, which is part of
\nan economic reform program agreed to with the IMF.<\/p>\n
\"The real problem would be how to handle technical problems,
\nnot to mention the problem we still have regarding the BCA
\ndivestment,\" Umar said.<\/p>\n
The IMF suspended the $400 million loan disbursement late last
\nyear after legislators rejected the plan to sell BCA.<\/p>\n
Separately, economist Didiek J. Rachbini said that he did not
\nsee the significance of the loan disbursement, adding that it was
\nnot what Indonesia really needed.<\/p>\n
\"What can we do with this $400 million? The costs we have had
\nto bear since late last year as a result of the loan postponement
\nhave been countless,\" he told The Jakarta Post.<\/p>\n
\"And I am not just speaking in monetary terms. As well as the
\nnegative sentiment (toward Indonesia), social and political
\neffects were a consequence of the delay.<\/p>\n
\"I am talking about people here. I am beginning to see that
\nthe IMF is not the right answer for Indonesia's problems. We need
\nto find a new solution to put the country's economy on the right
\ntrack,\" Didiek said.<\/p>\n
\"It's been four years since they first came in and look what
\nthey've done. They've dragged us into much deeper problems,\" he
\nadded.<\/p>\n
Suspension of the IMF loan late last year sent the rupiah
\ntumbling. Instability in the financial market caused various
\nadditional economic problems and to a certain extent contributed
\nto the downfall of former president Abdurrahman Wahid.<\/p>\n
The $400 million loan is part of the IMF's $5 billion loan
\nagreed to in early 2000 to help finance a three-year economic
\nreform program.<\/p>\n
Meanwhile, legislator Paskah Suzetta warned the government
\nagainst getting carried away with the IMF loan disbursement.<\/p>\n
Paskah Suzetta hailed the loan disbursement as \"a good
\nachievement\" for the government, but warned that follow-up
\nmeasures had to be taken to further boost investor confidence.<\/p>\n
\"It's a good step, but it has to be followed by other
\ninitiatives by the government in order to meet requirements
\nstated in the Letter of Intent signed with the IMF,\" Paskah
\nsaid.(03\/10)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mixed-reactions-greet-imfs-loan-disbursement-1447893297",
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