Government completes IMF reform target: Kwik
JAKARTA (JP): Coordinating Minister for the Economy, Finance and Industry Kwik Kian Gie said on Tuesday that all reform targets agreed upon with the International Monetary Fund (IMF) had been finalized.
"We've already met the IMF's deadline," Kwik told reporters.
Kwik was commenting on an internal government deadline which falls this Thursday, to implement all reform programs as set out by the IMF.
Among the last reform tasks finalized by the government was the replacement of all directors of state-owned Bank Rakyat Indonesia (BRI), which was announced late Tuesday.
On Monday, the government spurred on to complete the recapitalization of Bank Bali in a bid to meet the reform's deadline.
The bank's recapitalization has been delayed due to a loan scandal last year that centered on the transfer of US$80 million under a questionable cessie agreement.
Other reform tasks include the recapitalization of BRI, Bank Negara Indonesia (BNI), as well as a 1999 audit of the country's central bank, Bank Indonesia.
IMF chief representative for Indonesia John R. Dodsworth told news agency Dow Jones that the government should meet all reforms under its latest Letter of Intent (LoI) to the IMF within the "next few days".
The LoI contains the economic reform program. Indonesia's compliance to the LoI is a prerequisite in obtaining the IMF's financial bailout.
However, a volatile political climate has made it difficult for the government to implement economic policies with market sentiments reacting sensitively to any uncertainties.
The rupiah took a steep dive against the U.S. dollar in late April, but had already been weakening since early this year largely due to political uncertainties.
"The government is doing a good job of putting all of these things into place in difficult circumstances," Dodsworth said.
The completion of the reforms is vital in securing a third tranche of loans set for August, that may range between $380 million to $400 million.
The government failed to meet this year's first LoI deadline in April, prompting the IMF to delay the disbursement of the second tranche of loans of $400 million.
Indonesia obtained the funds after meeting the requirements of a second LoI in May and has thus far received $700 million from the IMF.
The loan is part of the IMF's $5 billion financial bailout package signed earlier this year to assist a three-year economic development program for Indonesia. (bkm)