RI could leave IMF program before the end of 2003: ING<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
Indonesia does not need to wait until the end of 2003 to free
\nitself from the International Monetary Fund (IMF) economic
\nprogram as long as the government can maintain the country's
\ncurrent positive progress in the macroeconomic area, an
\ninternational securities firm has said.<\/p>\n
\"Indonesia could graduate at least in the third or fourth
\nquarter of next year if the current bright macroeconomic picture
\ncan be maintained,\" Laksono Widodo, an analyst at securities firm
\nING Securities, told The Jakarta Post on Monday.<\/p>\n
A benefit Indonesia would get from ending its dependency on
\nthe IMF is an improvement to the country's sovereign rating.<\/p>\n
\"By ending ties with the IMF, RI could be more independent and
\nself-reliant to pursue its own economic policies,\" said Laksono.<\/p>\n
In a country report on Indonesia, ING Securities said that
\nMoody's sovereign rating for Indonesia of B3 was still six
\nnotches below the pre-crisis rating of Baa3. S&P's rating is
\neither 8 or 13 notches below the pre-crisis level, the report
\nadded.<\/p>\n
The current IMF program will expire at the end of this year.
\nThe three-year program was supposed to end in November this year,
\nbut the government extended the program for another year in a bid
\nto secure a rescheduling facility from the Paris Club of creditor
\nnations for some US$5.4 billion in sovereign debts maturing in
\n2002 and 2003.<\/p>\n
Under the three-year program, the IMF provides some $5 billion
\nin a loan facility, but in return the government must implement
\ncertain economic reform measures. The fund disburses the loan in
\ntranches, which goes into the central bank coffers to help
\nreplenish the country's foreign exchange reserves.<\/p>\n
There has been growing calls for the government to quickly end
\nthe IMF program here, with some arguing that the program is
\ndangerous to the country.<\/p>\n
Other experts have said the government might have to extend
\nthe IMF program again if it wants to obtain another debt
\nrescheduling facility from the Paris Club for 2004 and beyond.
\nThis facility is deemed crucial to ease the pressure on the state
\nbudget, heavily burdened by the huge cost of the government bank
\nbailout program during the late 1990s.<\/p>\n
Indonesia could graduate from the IMF program and still obtain
\nthe fund's support at the Paris Club forum only if the government
\ncan prove that the country has been making significant progress
\nin the economic reform program and has made a strong commitment
\nto continue the reform process even without the direct
\ninvolvement of the fund, some experts have said. One indicator of
\nprogress is an improvement in macroeconomic indicators, and
\nanother is the return of foreign investment here. South Korea and
\nThailand, two regional crisis-hit economies that have
\nsuccessfully graduated from the IMF, have been able to deliver
\nthis kind of progress.<\/p>\n
While Indonesia can be proud of its improvement in the
\nmacroeconomic picture, it is lagging in the area of direct
\nforeign investment, which, according to the Investment
\nCoordinating Board (BKPM), plunged by 42 percent during the first
\nhalf of this year compared to the same period last year, due
\nmainly to various uncertainties at home.<\/p>",
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