New target dates for economic reform package<\/p>\n
JAKARTA (JP): The following are new target dates for
\nIndonesia's economic reform program agreed with the International
\nMonetary Fund (IMF) Wednesday. Since the IMF-sponsored reform
\nprogram was launched last October, the government has completed
\nmore than 60 points of economic reform in various fields
\ncontained in the program. The IMF has arranged a US$43-billion
\nbailout to support the program.<\/p>\n
By end-June 1998:<\/p>\n
- Reduce the minimum capital requirements for existing banks.<\/p>\n
- Establish independent review committee to enhance transparency
\nand credibility of the Indonesian Banks Restructuring Agency's
\n(IBRA) operations. (Two Indonesian members have been nominated
\nand three foreign members are expected to be appointed, one each
\nto be nominated by the IMF, the World Bank and the Asian
\nDevelopment Bank).<\/p>\n
- Issue a revised and shortened negative list of activities
\nclosed to foreign investors.<\/p>\n
- Auction forest concessions and lengthen concession periods
\n(delayed).<\/p>\n
- Allow transferability of forestry concessions and delink their
\nownership from processing for new concessions.<\/p>\n
By Mid-July 1998:<\/p>\n
- Declare insolvency of six private banks intervened in April and
\nwrite down shareholder equity.
\nStarting mid-July 1998:<\/p>\n
- Take action to freeze, merge, recapitalize or liquidate the six
\nbanks for which audits have already been completed.<\/p>\n
By end-July 1998:<\/p>\n
- Issue presidential decree to provide appropriate legal powers
\nto IBRA, including its asset management unit (expected by mid-
\nJuly).<\/p>\n
- Announce plan for restructuring state banks through mergers,
\ntransfers of assets and liabilities or recapitalization prior to
\nprivatization.<\/p>\n
- Merge Bank Bumi Daya and Bank Pembangunan Indonesia (Bapindo)
\nand transfer their problem loans to the asset management unit of
\nIBRA (delayed from end-June).<\/p>\n
- Submit to Parliament a draft law to eliminate restrictions on
\nforeign investments in listed banks and amend bank secrecy with
\nregard to nonperforming loans (delayed from end-June).<\/p>\n
- Draft legislation enacting state bank privatization (delayed
\nfrom end-June).<\/p>\n
By end-August 1998:<\/p>\n
- Conduct portfolio, systems, and financial reviews of all IBRA
\nbanks as well as major non-IBRA banks by internationally
\nrecognize audit firms.<\/p>\n
- Submit to Parliament a draft amendment to the banking law,
\nincorporating procedures for the privatization of state banks and
\nthe removal of the limits on private ownership of banks.
\nBy end-September 1998:<\/p>\n
- Complete action plans for all 164 state enterprises.<\/p>\n
- Establish clear framework for reform of all state enterprises,
\nincluding privatization and restructuring. Also establish
\ntransparent sales process.<\/p>\n
- Develop a plan for closing nonviable public enterprises.<\/p>\n
- Initial sales of additional shares in listed state enterprises
\nincluding, at a minimum, the domestic and international
\ntelecommunications corporations.<\/p>\n
- Complete divestiture of two state enterprises that are
\npresently unlisted.<\/p>\n
- Complete action plans for restructuring banks under auspices of
\nIBRA.<\/p>\n
- Submit to Parliament a draft law to institutionalize Bank
\nIndonesia's autonomy (previously December 1998).<\/p>\n
- Initiate first case of an IBRA bank under the new bankruptcy
\nlaw.<\/p>\n
- Abolish quotas limiting the sale of livestocks.<\/p>\n
- Prepare regulations establishing procedures for mergers,
\nacquisitions and exit which facilitate corporate restructuring
\nwhile safeguarding against anti-competitive behavior.<\/p>\n
By end-October 1998:<\/p>\n
- Conduct portfolio, system and financial reviews of all non-IBRA
\nbanks by internationally recognized audit firms.
\nBy end-December 1998:<\/p>\n
- Reduce export taxes on logs and swan timber to 20 percent.<\/p>\n
- Complete divestiture of two additional state enterprises that
\nare presently unlisted.<\/p>\n
- Submit to Parliament draft law on competition to prevent the
\nabuse of dominant position and practices that restrict or distort
\nfree competition.<\/p>\n
- Complete audits of state oil and gas firm Pertamina, the State
\nLogistic Agency (Bulog), state electricity firm PT Perusahaan
\nListrik Negara and reforestation fund.<\/p>\n
- Establish clear profit and performance criteria for government
\nenterprises.<\/p>\n
- Audit nonviable public enterprises.<\/p>\n
- Draft and establish implementation rules for the new
\nenvironmental law.<\/p>\n
- Accelerate programs for converting to cleaner fuels.<\/p>\n
- Implement performance bonds and reduce land conversion targets
\nto environmentally sustainable levels.<\/p>\n
By end-March 1999:<\/p>\n
- Complete sales of additional shares in listed state
\nenterprises.<\/p>\n
- Complete divestiture of three additional state enterprises that
\nare presently unlisted.<\/p>\n
- Prepare plans for sale of at least one quarter of IBRA banks in
\n1999.<\/p>\n
- Prepare mechanism for the regular adjustment of administered
\nfood prices.<\/p>\n
Fiscal year 1998\/1999:<\/p>\n
- Ensure reforestation funds used exclusively for financing
\nreforestation programs.<\/p>\n
- Introduce community-based work programs to sustain purchasing
\npower of poor in both rural and urban areas.<\/p>\n
- Introduce micro credit scheme to assist small businesses.<\/p>\n
Ongoing:<\/p>\n
- Accelerate provisions under the Nontax Revenue Law of May 1997
\nto require all off-budget funds to be incorporated in budget
\nwithin three years (instead of five years).<\/p>\n
- Impose limits on and phase out Bank Indonesia (BI) credits to
\npublic agencies and public sector enterprises.<\/p>\n
- Strengthen BI's bank supervision department and strengthen
\nenforcement of regulations.<\/p>\n
- Establish program for divestiture of BI's interests in private
\nbanks.<\/p>\n
Over program period:<\/p>\n
- Conduct revenue review with IMF assistance (first step by end-
\nSeptember 1998).<\/p>\n
- Eliminate all restrictions on bank lending except for
\nprudential reasons or to support cooperatives or small-scaled
\nenterprises.<\/p>\n
- IBRA will continue to take control of or freeze additional
\nbanks that fail to meet liquidity or solvency criteria. Where
\nnecessary, any such action will be accompanied by measures to
\nprotect depositors or creditors in line with the government
\nguarantee.<\/p>\n
- Introduce deposit insurance scheme.<\/p>\n
- Eliminate all export restrictions.<\/p>\n
By end program:<\/p>\n
- Phase out remaining quantitative import restrictions and other
\nnon-tariff barriers.<\/p>\n
By 2000:<\/p>\n
- Phase out local content program for motor vehicles.<\/p>\n
By 2001:<\/p>\n
- Prepare state banks for privatization.<\/p>\n
By 2003:<\/p>\n
- Gradually reduce tariffs on non-food agricultural products to a
\nmaximum of 10 percentage points.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-target-dates-for-economic-reform-package-1447893297",
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"sponsor": "Okusi Associates",
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