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.