Rizal upbeat IMF, govt will reach deal<\/p>\n
JAKARTA (JP): Coordinating Minister for the Economy Rizal
\nRamli said on Tuesday he was confident the government would be
\nable to reach an agreement with the International Monetary Fund
\nsoon.<\/p>\n
\"I'm confident that our government and the IMF will reach an
\nagreement soon,\" Rizal said in a press statement.<\/p>\n
\"I am visiting Washington D.C. to further discuss our
\ngovernment's position on the amendments to the central bank law,
\nand the remaining measures concerning (fiscal) decentralization
\nand corporate restructuring,\" he added.<\/p>\n
Rizal left Jakarta late on Monday for Washington to meet IMF
\nfirst deputy managing director Stanley Fischer and U.S. Treasury
\nSecretary Paul O'Neill.<\/p>\n
Government relations with the IMF have been strained by a
\ndelay in the disbursement of the Fund's third loan tranche of
\nUS$400 million late last year.<\/p>\n
The Fund made the delay after the government failed to
\nimplement its promise to sell ownership in Bank Central Asia and
\nBank Niaga in December, and to address concerns over the new
\nfiscal decentralization policy and proposed amendments to the
\ncentral bank law.<\/p>\n
The IMF promised the current administration some $5 billion in
\nbailout loans in January last year. It has so far disbursed
\naround $1 billion. The disbursement of the Fund's money is seen
\nas a key factor to help maintain investors confidence in the
\nailing economy.<\/p>\n
There have also been worries that the Paris Club of creditor
\nnations would cancel the restructuring of some $2.8 billion of
\nIndonesian official debts maturing this year if the IMF continued
\nto delay its loan to Indonesia.<\/p>\n
Last week Rizal complained that the IMF had been pressing too
\nhard, saying it was difficult to implement every reform while the
\ncountry was going through its complex transition to democracy.<\/p>\n
The IMF has expressed concern over the government proposed
\namendment of the central bank law, saying it could undermine the
\nindependence of Bank Indonesia.<\/p>\n
Critics have said that the planned amendment was merely
\ndesigned to accommodate the wish of President Abdurrahman Wahid
\nto dismiss Bank Indonesia Governor Sjahril Sabirin and his
\ndeputies.<\/p>\n
But Rizal has often said that the amendment was needed to
\nboost the accountability of Bank Indonesia amid alleged rampant
\ncorruption at the central bank in the past.<\/p>\n
The IMF has also demanded the government issue a special
\nruling prohibiting provincial and district administrations from
\nborrowing both overseas and domestically to prevent a borrowing
\nspree following the implementation of the new fiscal
\ndecentralization policy.<\/p>\n
But Rizal has said that the government couldn't totally ban
\nregions from borrowing because the law allows them to make debts
\nunder strict conditions to help finance their greater powers of
\nautonomy.<\/p>\n
Rizal left for Washington only two days after Abdurrahman's
\nfour foreign advisers, who met with the President over the
\nweekend, urged the government to mend its ties with the IMF and
\nto stick to the reform agenda already agreed with the
\nmultilateral agency.<\/p>\n
\"We believe Indonesia is poised at a critical juncture. It
\nmust build on a year of promising, yet still highly fragile and
\nincomplete, economic recovery,\" the advisers said in a memo to
\nAbdurrahman which was released on Tuesday.<\/p>\n
\"That effort would be surely jeopardized -- indeed made
\nfruitless -- by failure to address certain issues, some chronic,
\nsome new,\" they added.<\/p>\n
The advisers also recommended a withdrawal of the planned
\namendment of the central bank law.<\/p>\n
\"We would recommend that you allow a period of review and
\nreconsideration, including withdrawal of present legislation,\"
\nthey said.<\/p>\n
One of the controversial points in the amendment of the
\ncentral bank law is the possibility of senior politicians being
\nappointed as members of Bank Indonesia's board of governors.<\/p>\n
The proposed bill is currently being debated by the House of
\nRepresentatives special team.<\/p>\n
Separately, some legislators said on Tuesday that the
\ngovernment should reconsider withdrawing the planned amendment of
\nthe central bank law due to current unfavorable development.<\/p>\n
\"Our faction thinks that the amendment is not a very urgent
\nmatter,\" said legislator Faisal Baasir of the United Development
\nParty.<\/p>\n
He pointed out that the government should instead focus now on
\nefforts to recover the ailing economy, particularly bank and
\ncorporate restructuring programs.<\/p>\n
Paskah Suzetta, spokesman of the Golkar Party, said that he
\nwould also approve if the government decided to stop the
\namendment process.<\/p>\n
But legislator Rizal Djalil of the Reform Faction warned that
\nthe government would be \"politically humiliated\" if it withdrew
\nitself from the initial commitment to amend the central bank law.<\/p>\n
\"I demand the IMF to stay out. They must not interfere,\" he
\nsaid. (rei)<\/p>",
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