Govt wants IMF not to interfere in asset sales

JAKARTA (JP): The government said on Friday that it had asked the International Monetary Fund (IMF) not to interfere in the sale of government assets as such a move would jeopardize their prices.

Finance Minister Rizal Ramli said the IMF should refrain from imposing conditions on the sale of government assets.

"How we do it (asset sales), when we do it and what we sell -- leave it to the government of Indonesia," Rizal said after meeting with a visiting IMF team at his office.

An IMF special mission arrived in Jakarta on Thursday, led by the institution's Asia Pacific deputy director Anoop Singh.

According to Rizal, if people knew the deadline for the sale of a certain company, they would force the government into accepting a low price.

"On asset sales, we would be better not go into the names of the companies as it will just drive prices down," Rizal said.

His statement came amid reports of difficulties encountered by the government in the sale of the country's largest private bank, PT Bank Central Asia (BCA).

BCA, which has been nationalized under the Indonesian Bank Restructuring Agency (IBRA), is slated for sale this month as promised by the government to the IMF.

The government missed its initial target to sell BCA late last year, which prompted the IMF to withhold a US$400 million loan tranche for Indonesia.

This time around, IBRA was supposed to announce the successful bidder for a 30 percent stake in BCA last week, but postponed the declaration saying it was extending negotiations to pursue a better deal.

Analysts see the move as signaling that bidders' prices were too low -- a suspicion IBRA has declined to confirm.

The IMF special mission is in Jakarta for a nine-day meeting with the government to draw up a new Letter of Intent (LoI), which is an agreement containing a set of economic reform targets.

The new LoI would then be presented to the IMF board in Washington for approval, a necessary condition for the disbursement of the fund's next loan tranche.

Reaching an agreement with the IMF is crucial for the country, particularly in its effort to help revive investor confidence in the ailing economy and ensure the support of other major lenders including the Paris Club of creditor nations, which promised last year to reschedule Indonesia's sovereign debt maturing this year.

Rizal added that he had asked the IMF to focus the current round of negotiations on macroeconomic policies, such as monetary stability.

According to him, the IMF should drop its tendency of bringing microeconomic issues into talks with Indonesia.

Asked how the IMF responded to his requests, Rizal said their response had been positive.

Singh refused to comment when he left Rizal's office, but promised a statement next week.

Rizal is known for his hard stance toward the IMF. The two have been at loggerheads over a number of issues, with the latest one being the amendment of the central bank law.

Earlier in the day, the IMF special mission also met President Abdurrahman Wahid for a breakfast meeting.

Coordinating Minister for the Economy Burhanuddin Abdullah, who was present at the meeting, said talks had been positive.

Burhanuddin's deputy, Dipo Alam, added that Indonesia hoped the IMF could soon extend its loan installment and prompt other lenders to follow suit.

Separately, legislators demanded on Friday that the IMF and the World Bank make amends for their roles in bringing Indonesia's economy to its current state of crisis.

Some 50 legislators from various political parties signed a joint statement in which they accused the IMF of violating Indonesia's economic sovereignty.

They also said that a large portion of loans from the IMF and the World Bank were misappropriated and had fallen into the wrong hands. (bkm)