Fischer, Rizal review RI reforms

Fischer, Rizal review RI reforms

DAVOS, Switzerland (Dow Jones): A top official from the
International Monetary Fund has met with Indonesia's senior
economic minister to discuss the country's progress on reform,
but no agreement on unblocking a US$400 million tranche of IMF
loans under the $5 billion bailout program was reached.

"We reviewed the situation - this was not a negotiation," IMF
Deputy Director Stanley Fischer told journalists Saturday on the
margin of the World Economic Forum here.

Fischer wouldn't be drawn on any timeframe for a decision on
the loan installment, which the IMF delayed last month after
Indonesia failed to complete a number of economic reforms under a
letter of intent with the Fund.

On Friday, Indonesia's Senior Economics Minister Rizal Ramli
told Dow Jones Newswires he is confident his country will meet
the IMF's conditions, and said he expected an agreement on the
loan package.

But Rizal noted a formal decision would require a technical
review by a team from the IMF.

On the sale of nationalized Bank Central Asia - one of the
IMF's conditions - the government is moving towards privatization
"early this year - we have already proposed to Parliament to do
that."

Rizal stressed the strength of Indonesia's economic recovery,
noting that all indicators point to a much better than expected
turnaround in 2000, after near-zero growth in 1999.

Rizal said gross domestic product increased by 4.8 percent in
2000, while exports rose 23 percent and retail sales rose 12
percent. Electricity usage increased by 11 percent, and capacity
utilization rose to around 70 percent-80 percent, from 50
percent-60 percent the previous year.

The budget deficit, meanwhile, was smaller than expected, at
3.2 percent of GDP, showing "the government is very
conservative," the minister said.

"We are on the right track, and we have to keep the momentum
going," Rizal said. "Of course we have to be careful of the
slowdown of the U.S. economy, but since most of our products are
competitive we are optimistic we will be able to increase our
market share."