Government to set up special team to assess IMF role in Indonesia
Government to set up special team to assess IMF role in Indonesia
Dadan Wijaksana, The Jakarta Post, Jakarta
Finance minister Boediono said on Monday the government plans to
set up a special team soon to review the results of reform
programs the government has carried out under the International
Monetary Fund (IMF).
The team will be tasked to explore the possibility of whether
Indonesia is financially competent without support from the
international community, Boediono said.
"They will examine the costs and benefits of our program with
the IMF," he was quoted as saying by Antara, adding that the
government would meet with the House of Representatives and
economic experts early next year to discuss the plan.
Consequently, assessments on whether the country still needs
an umbrella to boost international confidence -- much like the
current role of the IMF for Indonesia -- would also be conducted,
Boediono added.
Although details remain sketchy, his remarks should serve as
an indication of preliminary preparations on part of the
government in entering the final year of the current four-year
financial assistance program with the IMF.
Under a US$4.8 billion loan program, IMF assistance to
Indonesia is scheduled to terminate by the end of next year.
Signed in 1999, the program was to have ended in December this
year, but the government had extended it for another year. Of the
total, the country has so far secured $3 billion from the fund.
The program is meant to help Indonesia, hard hit by the severe
financial crisis in late 1997-1998, get back on track towards
recovery.
The government has claimed the program benefits the country
not only in terms of financial aid, but also in terms of gaining
support from other foreign countries and institutions, whose
judgments are always based on the IMF's assessment.
Entering the fifth year of the program however, Indonesia's
recovery has yet to move at full swing. Concerns have been voiced
that Indonesia might need to re-extend the program in order not
to lose its reform momentum, but this scenario would definitely
draw furious criticism.
Despite having a year left under the contract, debates over
the need for Indonesia to continue its relationship with the IMF
has been mounting already.
Outspoken State Minister of National Development Planning Kwik
Kian Gie and speaker of the People's Consultative Assembly Amien
Rais are among those who have blatantly attacked the IMF's role
in the country. They argue that the country would be better off
without the IMF, which they claim to have pushed the country into
deeper crisis.
According to research conducted by an international securities
firm, Indonesia can free itself from the IMF without harmful
consequences, as long as it maintains its reform program.
Indonesia could put an end to its relationship with the IMF in
the third or fourth quarter of next year if progress can be made
in its area of reform, ING Securities said recently.
This is echoed by David Nellor, the current IMF representative
to Indonesia, who recently expressed his vote of confidence in
the country that it would graduate from the fund, given time.
Hubert Neiss, the former top executive of the IMF during the
program's early years in Indonesia, told The Jakarta Post that
the country has a good chance of leaving the program successfully
provided "the government make further substantial progress."
A benefit to Indonesia from ending its dependency on the IMF
is an improvement to the country's sovereign rating.