IMF review team expected to arrive next week: Official
IMF review team expected to arrive next week: Official
The Jakarta Post, Jakarta
A team from International Monetary Fund (IMF) is expected to
arrive here next week to review the progress of the country's
economic reforms, which were agreed to in the letter of intent
(LoI) signed by the government and the fund in June.
"The team, led by Daniel Citrin, is scheduled to arrive in
Indonesia next week," Anggito Abimanyu, a senior official at the
finance ministry, said late on Monday.
Citrin is the IMF's senior adviser for the Asia-Pacific
region.
Indonesia is tied to a three-year US$5 billion bailout loan
from the IMF. But Indonesia must implement certain economic
reforms to get access to the loan, aimed at strengthening the
country's balance of payment.
Indonesia has so far received $2.6 billion from the IMF to
help shore up investor confidence. The next loan tranche is
expected to be valued at about $350 million. The money will be
disbursed once the IMF board of directors approves the country's
latest LoI, which will be jointly drawn up with the IMF review
team.
Anggito said the review team would focus on the country's
commitment to privatizing state-owned enterprises, raising cash
from the sale of bank assets and reducing its budget deficit.
While the budget deficit is seen as being on track to meet IMF
targets, the government is still behind in its privatization and
bank asset divestment programs.
As of the end of first semester of this year, the government
only raised some Rp 2.5 trillion ($244 million) from the
privatization of state enterprises, far short of the Rp 3.5
trillion target for the semester. For the year, the privatization
target is Rp 6.5 trillion.
The proceeds came from the sale of shares in state-owned
telecommunications firms PT Telkom and PT Indosat.
Racing against time, the government is now pinning its hopes
on the planned sale of shares in Bank Mandiri, the country's
largest bank in terms of assets.
As stated in the last LoI, some 30 percent of the shares in
Mandiri are to be sold in the third quarter of this year.
On the divestment front, the sales of stakes in Bank Niaga,
Bank Danamon and Lippo Bank that had been planned for this year
are looking increasingly unlikely.
Through the Indonesian Bank Restructuring Agency (IBRA), the
government currently owns a 97.15 percent stake in Bank Niaga,
99.3 percent in Bank Danamon and 57 percent in Lippo Bank.
Niaga is now selling up to 20 percent of its shares directly
through the stock market, in order to obtain a benchmark price
before going ahead with the disposal of a 51 percent stake to
strategic partners.
That is expected to be completed in mid-September.
The drawn-out process of the Niaga sale has disrupted the
divestment efforts at the other two banks.
The government was scheduled to launch the sale of a majority
stake in Bank Danamon next month, with the completion of the sale
by the end of the year. This was to be followed by the sale of a
majority stake in Lippo Bank, though this appears to be unlikely
now.