Post-IMF program announced<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
After a month-long delay, the government announced on Monday
\nthe country's post-International Monetary Fund (IMF) economic
\nreform program, which is expected to help maintain investor
\nconfidence in the economy once the existing IMF economic bailout
\nprogram ends later this year.<\/p>\n
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
\nJakti said the program covered three main goals, including to
\nmaintain macroeconomic stability, continue banking sector reform,
\nand increase investment, export and employment opportunities.<\/p>\n
\"This is a historical moment for us since we're the last
\n(crisis-hit) country in Asia to complete the IMF program,\" he
\ntold a press conference.<\/p>\n
Dorodjatun said President Megawati Soekarnoputri had signed a
\npresidential decree approving the post-IMF program, which is
\ncontained in a document called the White Paper.<\/p>\n
The complete details of the program would be published on
\nTuesday on the website of the Office of the Coordinating Ministry
\nfor the Economy at www.ekon.go.id, he said.<\/p>\n
The White Paper document contains a matrix of economic reform
\nprograms and their time-table for implementation.<\/p>\n
In the bank reform area, for example, the country's banks are
\nexpected to comply with the Basel banking principles by 2004.<\/p>\n
The government has decided to no longer extend the current
\nInternational Monetary Fund economic bailout program when it
\nexpires at the end of this year. It, however, opted for a post
\nprogram monitoring arrangement with the Fund, under which the
\ngovernment would design its own reform program without the
\nintervention of the IMF. Since the 1997 economic crisis, the
\ngovernment has to send a quarterly letter of intent (LoI) to the
\nIMF in exchange for loans.<\/p>\n
The economic blueprint is crucial as it would help maintain
\ninvestor confidence in the economy. Presidential elections in
\n2004 could encourage the government to enact popular spending
\nmeasures to create employment at the expense of the country's
\nfinances, some observers fear.<\/p>\n
Dorodjatun said the macroeconomic-stability program aimed to
\ncreate fiscal sustainability, lowering inflation to levels in the
\ncountry's main trading partners, and to maintain healthy foreign
\nexchange reserves in a medium term.<\/p>\n
To achieve these goals, the government's fiscal policies would
\nbe directed towards achieving a balanced budget by 2005-2006 from
\na deficit of around 2 percent of gross domestic product (GDP)
\nthis year.<\/p>\n
The government also aims to reduce its debt level from the
\ncurrent 67 percent of GDP to a \"secure level,\" and press ahead of
\nwith tax reform.<\/p>\n
Meanwhile, Bank Indonesia Governor Burhanuddin Abdullah said
\nthat to help achieve the macro-stability goal, the central bank
\nwould focus on lower inflation, and maintain a realistic exchange
\nrate of the rupiah.<\/p>\n
The financial sector reform is directed towards creating a
\nsafety net in the banking and financial industries through the
\nestablishment of a deposit insurance scheme, reviving Bank
\nIndonesia's lender of the last resort role, and creating the
\nFinancial Sector Authority. Other measures include continuing
\nbank restructuring programs such as the sale of government shares
\nin banks; boosting measures against money laundering activities
\n(the House of Representatives is scheduled to approve the
\ncountry's new money-laundering law which meets international
\nstandards); and consolidating the insurance and pension fund
\nindustries.<\/p>\n
Programs to boost investments, exports and job opportunities
\ncenter on streamlining the investment and trade regulations;
\nboosting legal certainty by revising the bankruptcy law and
\nfixing unfriendly policies issued by provincial or district
\nadministrations; rehabilitating and developing infrastructure;
\nand improving transparency in the public sector.<\/p>\n
The government has been under pressure to push investment and
\nexport in a bid to create higher economic growth enough to
\ngenerate jobs for the millions of unemployed people.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/post-imf-program-announced-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}