IMF agrees to disburse another $365 million to RI
IMF agrees to disburse another $365 million to RI
Dadan Wijaksana, The Jakarta Post, Jakarta
The International Monetary Fund (IMF) has agreed to disburse its
latest loan tranche to Indonesia, in what the government claims
as a vote of confidence in the country's economy despite the
adverse impacts of the Oct. 12 Bali bombings.
The approval of the loan, amounting to around US$365 million,
was reached following a meeting of the IMF's board of directors
to review the country's seventh letter of intent (LoI) to the
Fund, which was submitted to Washington on Nov. 20, a press
release said.
The seventh LoI refers to the government's quarterly report to
the IMF over progress made in meeting a set of promised economic
reform targets.
With the disbursement of the fresh loan, the IMF has channeled
a total of about $3 billion, out of a total loan package worth $5
billion agreed to between the government and the IMF in early
2000.
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
Jakti hailed the IMF decision as a reflection of the Fund's
confidence in the progress of the country in carrying out its
economic reform program.
"Indonesia's macro-economic improvement which is based on
fiscal consolidation and monetary stability has produced economic
growth, a more controlled inflation and improvement in the state
of the balance of payment," he said in the press release.
The progress, he added, was made even after the economy was
hurt by the devastating terrorist bomb attack on Bali, which had
worsened the country's investment climate on which several LoI
targets relied on.
The LoI outlines the country's economic reform program and
contains time bound targets which the government must meet in
return for a quarterly disbursement of the IMF loan.
On Fiscal and monetary policy, as stated in the last LoI, all
June to September quantitative performance criteria and
indicative targets were met, with fiscal policy being on track
with a deficit target of 2.5 percent of gross domestic product
(GDP).
Progress has also been made on the divestment program, under
which the government has completed the sale of shares in Bank
Niaga.
The legal merger of five banks under IBRA was completed in
October with an operational merger to follow suit this month.
However, there are also a number of unfinished reform targets,
which should have been completed by September.
One of those is the delayed burden sharing deal between the
finance ministry and Bank Indonesia over some Rp 138.4 trillion
(about $15 billion) in liquidity support loans channeled to
troubled banks during the late 1990s financial crisis.
Another is the delayed creation of an anti-corruption
commission, which should have been set up by June.
Elsewhere, Dorodjatun said that the immediate challenges for
the country now was to take advantage of the above positive
momentum to boost investment and revive the real sector to help
create more employment to jobless Indonesians.
Dadan Wijaksana, The Jakarta Post, Jakarta
The International Monetary Fund (IMF) has agreed to disburse its
latest loan tranche to Indonesia, in what the government claims
as a vote of confidence in the country's economy despite the
adverse impacts of the Oct. 12 Bali bombings.
The approval of the loan, amounting to around US$365 million,
was reached following a meeting of the IMF's board of directors
to review the country's seventh letter of intent (LoI) to the
Fund, which was submitted to Washington on Nov. 20, a press
release said.
The seventh LoI refers to the government's quarterly report to
the IMF over progress made in meeting a set of promised economic
reform targets.
With the disbursement of the fresh loan, the IMF has channeled
a total of about $3 billion, out of a total loan package worth $5
billion agreed to between the government and the IMF in early
2000.
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
Jakti hailed the IMF decision as a reflection of the Fund's
confidence in the progress of the country in carrying out its
economic reform program.
"Indonesia's macro-economic improvement which is based on
fiscal consolidation and monetary stability has produced economic
growth, a more controlled inflation and improvement in the state
of the balance of payment," he said in the press release.
The progress, he added, was made even after the economy was
hurt by the devastating terrorist bomb attack on Bali, which had
worsened the country's investment climate on which several LoI
targets relied on.
The LoI outlines the country's economic reform program and
contains time bound targets which the government must meet in
return for a quarterly disbursement of the IMF loan.
On Fiscal and monetary policy, as stated in the last LoI, all
June to September quantitative performance criteria and
indicative targets were met, with fiscal policy being on track
with a deficit target of 2.5 percent of gross domestic product
(GDP).
Progress has also been made on the divestment program, under
which the government has completed the sale of shares in Bank
Niaga.
The legal merger of five banks under IBRA was completed in
October with an operational merger to follow suit this month.
However, there are also a number of unfinished reform targets,
which should have been completed by September.
One of those is the delayed burden sharing deal between the
finance ministry and Bank Indonesia over some Rp 138.4 trillion
(about $15 billion) in liquidity support loans channeled to
troubled banks during the late 1990s financial crisis.
Another is the delayed creation of an anti-corruption
commission, which should have been set up by June.
Elsewhere, Dorodjatun said that the immediate challenges for
the country now was to take advantage of the above positive
momentum to boost investment and revive the real sector to help
create more employment to jobless Indonesians.