IMF, govt to revise 2003 budget assumptions
Dadan Wijaksana The Jakarta Post Jakarta
A team from the International Monetary Fund (IMF) arrived here on Friday to discuss with the government the revision of assumptions in the 2003 state budget in the wake of the horrific Bali bombings.
"We come here to evaluate the budget assumptions after the Bali tragedy," IMF deputy director for the Asia Pacific Daniel Citrin was quoted as saying by Antara.
The IMF team is scheduled to remain in Indonesia through Oct. 31.
The deadly attacks less than two weeks ago -- which left close to 200 people dead and hundreds of others injured -- is expected to have a significant impact on the economy, which will be felt next year.
As such, analysts say, many assumptions in the budget made by the government prior to the attack should be revised in view of the possible drop in revenue.
The government has already said the Bali attack made a revision of the budget assumptions inevitable.
"We're now finalizing a proposal to revise the assumptions in the 2003 budget. The results will then be discussed with the House of Representatives," Coordinating Minister for the Economy Dorodjatun Kunjoto-Jakti said in a press release on Friday.
Officials have said the government could lose Rp 10.8 trillion in potential tax revenue and some Rp 1.5 trillion in potential custom revenue due to the bombing.
The draft 2003 state budget was submitted by the government to the House in August. The House will begin its new session on Oct. 29, after a month-and-a-half recess.
In the draft budget, the government assumes 5 percent economic growth, 8 percent inflation and an exchange rate of Rp 8,700 per dollar.
Dorodjatun said that aside from the IMF the government had also invited the country's major donors, such as the World Bank and the Asian Development Bank, to discuss the budget revisions and possible additional pledges to help minimize the impact from Bali.
Proposals for additional loans will be presented during a meeting with the Consultative Group on Indonesia (CGI), he added.
Elsewhere, Citrin confirmed that the IMF team would review some of the economic reform targets stated in the letter of intent (LoI) signed with the government.
While Indonesia has made progress in some of the reform targets, it is still lagging behind in various others, namely the establishment of an anticorruption commission, divestment of Bank Danamon, privatization and the issuance of treasury (T)-bills.
Under the latest LoI, the government should achieve all of those targets by the end of this month.
The failure to meet the targets could lead the IMF to halt its lending programs with the government.
Indonesia and the IMF are tied to a $5 billion loan package, under which Indonesia is required to comply with economic targets set out by the fund.