Government expects IMF to disburse loan in August
Government expects IMF to disburse loan in August
JAKARTA (JP): The government said on Monday it expected the
International Monetary Fund (IMF) to disburse its long-delayed
US$400 million loan tranche by August.
Coordinating Minister for the Economy Burhanuddin Abdullah
said the IMF mission would be able to finalize its review of
Indonesia's progress with economic reform by Friday.
"Therefore, we are quite optimistic that the third loan
tranche will be disbursed in August," he stated, after attending
a Cabinet meeting chaired by Vice President Megawati
Soekarnoputri.
Burhanuddin's confidence came amid concern that the IMF might
continue to hold up its loan until Indonesia resolved the
political uncertainty regarding President Abdurrahman Wahid's
leadership.
A new president and new government are expected to emerge from
the special session of the People's Consultative Assembly early
next month that is widely expected to go ahead with its motion to
impeach President Abdurrahman.
Burhanuddin earlier said the government wanted to speed up
negotiations with the IMF in anticipation of the Assembly's
special session.
The IMF special team arrived here last week to work on a new
Letter of Intent (LoI) with the government, to replace the old
one signed last September.
Led by the fund's Asia Pacific deputy director Anoop Singh,
the visit of the review team has signaled the end of the IMF's
six-month loan suspension to Indonesia.
IMF held up a $400 million loan package to Indonesia last
December after the government missed several of its reform
targets, as stipulated in the September LoI.
The government postponed the divestment of its shares in Bank
Central Asia (BCA) and Bank Niaga, even though their sales were
specific LoI targets.
Plans to allow regional administrations to issue bonds drew
criticism from the IMF, on the grounds that they would burden the
state budget.
Concern also arose on plans to amend the central bank law, a
move the IMF saw as jeopardizing Bank Indonesia's independence.
Indonesia then promised to divest BCA and Bank Niaga this
year, deferred plans to allow regional administrations to issue
bonds, and included IMF experts in discussions over the amendment
of the central bank law.
The signing of a new LoI is a precondition for disbursement of
the $400 million loan tranche.
Burhanuddin said that current talks between the IMF and the
government were running smoothly.
"We're talking about technical details and numbers, so this
represents quite some progress. Everything is proceeding as we
expected it would," he said.
Meanwhile, Finance Minister Rizal Ramli said the government
would go ahead with the plan to acquire publicly listed PT Bank
Internasional Indonesia (BII) by state-owned Bank Mandiri.
He was responding to reports that the IMF had warned the
government of the risks Bank Mandiri might face with the
acquisition.
Analysts have also warned that an acquisition is now untimely,
saying that Bank Mandiri, the country's largest bank that
resulted from the merger of four state banks in 1999, is still
struggling to consolidate its operations after the merger process
and recapitalization.
"They (the IMF) only asked for clarification, explanations on
certain steps, and why the option had been chosen," he said.
Most analysts saw the acquisition as an effort to bail out BII
from bankruptcy.(bkm/dja)