RI almost certain to part with IMF this year<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
The Indonesian government is almost certain not to extend its
\ncontract with the International Monetary Fund (IMF), which will
\nterminate at the end of this year.<\/p>\n
Aside from forming a team to review the most suitable exit
\nstrategy, the government has also set a team tasked with
\nreviewing policies to be applied after the program ends.<\/p>\n
On Thursday, both teams conducted closed-door meetings with
\nvarious parties to draw up the most suitable policies for the
\ngovernment.<\/p>\n
The exit strategy team, headed by Anggito Abimanyu, met with
\nrepresentatives of the Indonesian Chamber of Commerce and
\nIndustry (Kadin) and a number of business associations.<\/p>\n
Sources said that the meeting discussed the future of tax
\nreforms, when the IMF was no longer in charge of its supervision.
\nKadin, the sources said, wanted to make sure that the tax reforms
\nwould not place additional burdens on businesses.<\/p>\n
At present, the exit strategy team has yet to come up with
\noptions on how to part ways with the IMF, but there are several
\navailable alternatives.<\/p>\n
Meanwhile, the policy review team, headed by State Minister of
\nState Enterprises Laksamana Sukardi, met with Japanese economists
\nto discuss recommendations on how to improve the country's
\nmacroeconomic conditions in a post-IMF era. The Indonesian-
\nJapanese think tank is known as the Joint Indonesian-Japanese
\nCooperation Team.<\/p>\n
Economist Sri Adiningsih, a team member, said the
\nrecommendations from the team had been presented to President
\nMegawati Soekarnoputri on the same day.<\/p>\n
"The recommendations cover the problems that might lie ahead
\nand what measures should be taken, as well as the preparations
\nthat should be made after the IMF era," Adiningsih told The
\nJakarta Post after the meeting.<\/p>\n
Other members of the Indonesian team include economist Sri
\nMulyani Indrawati, education expert and legislator Mochtar
\nBuchori and legislator Herry Ahmady -- the latter two are both
\nfrom the Indonesian Democratic Party of Struggle.<\/p>\n
The Japan team, led by Shujiro Urata, a professor at Waseda
\nUniversity, comprises of professors from Japan's noted
\nuniversities and experts from economic and trade policy
\ninstitutions.<\/p>\n
Also present at Thursday's meeting were Indonesian Bank
\nRestructuring Agency (IBRA) chairman Syarifuddin Temenggung,
\nIndonesian Ambassador to Japan Abdul Irsan, and officials from
\nthe Japanese Embassy and the Japanese International Cooperation
\nAgency (JICA).<\/p>\n
One official, who spoke on condition of anonymity, said the
\nrecommendations basically covered strategies on how to deal with
\nstate financial issues as well as the confidence crisis among
\nforeign creditors that would possibly arise, as most creditors
\ncurrently rely on the IMF to gauge Indonesia's credit-worthiness.<\/p>\n
To maintain foreign creditors' confidence in the government,
\nthe joint Indonesian-Japanese team of experts recommended that
\nthe government "make the most use of" the Consultative Group for
\nIndonesia (CGI).<\/p>\n
The CGI may serve as a platform for the government and its
\ninternational counterparts to discuss various macroeconomic
\npolicies and their applications.<\/p>\n
Further, the team also suggested that the government continue
\nwith the structural reform programs as outlined in the
\ngovernment's letters of intent (LoIs) to the IMF.<\/p>\n
On how to boost revenues, the team suggested the government
\nlaunch a tax reform by focusing not on a higher tax rate, but a
\nhigher revenue yield and by creating a more balanced burden for
\nall taxpayers.<\/p>\n
According to the team, the government needed to increase the
\nstate budget revenue by up to 2 percent in Gross Domestic Product
\n(GDP) to fund important expenditures.<\/p>\n
To cover the possible budget deficit, the team also suggested
\nthat the government borrow from the domestic market by issuing
\nbonds.<\/p>\n
More and more investors have recently invested in government
\nbonds, in addition to the central bank's promissory notes (SBI),
\nas both tools are considered safe.<\/p>\n
As of December last year, the country's domestic debts stood
\nat Rp 650.4 trillion (US$72 billion) -- all in the form of
\ngovernment bonds to salvage domestic banks, with a large chunk of
\nthem due to mature between 2004 and 2009.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-almost-certain-to-part-with-imf-this-year-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}