IMF satisfied with RI reform implementation
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)