IMF satisfied with RI reform implementation
JAKARTA (JP): The International Monetary Fund (IMF) is quite satisfied with Indonesia's performance in implementing its ongoing economic reform measures, IMF special envoy Prabhakar Narvekar said yesterday.
Narvekar told reporters after a meeting with Vice President B.J. Habibie that he was optimistic the IMF executive board would agree to disburse its suspended credit outlay on time.
However, the final decision will be made by the 24-member board which is to meet on May 4, he said.
"I am optimistic. But, as you see, this is the full board's privilege and right to say or to do anything they want to do," Narvekar added.
"A very close monitoring is required of the policies and it is very difficult to see, as the situation is changing every month, it is very difficult to forecast and to see ahead what is going on."
Narvekar also confirmed that the government had given its official assurance that it completely opposed any restriction on clove trading.
"You read that in today's (yesterday) newspaper reports."
Minister of Industry and Trade Mohamad "Bob" Hasan, Minister of Finance Fuad Bawazier and Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya made a joint statement Monday denying newspaper stories that PT Kembang Cengkeh Nasional (KCN), controlled by Soeharto's youngest son Hutomo Mandala Putra, had taken over the clove trading monopoly from the now defunct BPPC marketing agency.
The government dissolved the Clove Marketing and Buffer Stock Agency (BPPC) ahead of the June deadline, as set out in the reform package.
Earlier reports, however, quoted the executives of several clove cigarette companies in Central Java as complaining that they were required to buy cloves from KCN as a condition to get excise tax stamps from the Directorate General of Customs and Excise Tax.
The IMF disbursed the first tranche of $3 billion in aid immediately after the signing of the bailout reform package in early November.
But the IMF delayed the second tranche of $3 billion scheduled last month after Indonesia failed to implement key terms of its agreement with the IMF.
Under a revised program agreement reached earlier this month, Indonesia is subject to monthly performance reviews instead of quarterly reviews under the initial IMF program.
Separately, Narvekar and World Bank Country Director for Indonesia Dennis de Tray cautioned yesterday that Indonesia would not receive the full US$3 billion in the IMF's second tranche as had been promised.
"I think it will be $1 billion per month," De Tray said yesterday afternoon after a meeting with Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita.
He confirmed that the amount of the second disbursement would be decided by the IMF's executive board meeting on May 4.
Narvekar, who also attended the meeting with Ginandjar, concurred that the scenario foreseen by De Tray was likely to occur.
"It may be that way, and I think it's all right," he said.
He explained that the change in the disbursement method would be made necessary by the difficulties in assessing the fast development in the country.
"Three months ago we could not have forecast what the situation is today.
"So we move forward one month at a time," he said, pointing out that the board would meet every month and assess the situation and, accordingly, decide how much money to disburse.
Regarding Indonesia's commitment to the IMF reform package, Narvekar said that it had been progressing "quite well and very satisfactory". (prb/rei)