IMF seen deciding next aid disbursement soon

JAKARTA (JP): The IMF executive board is expected to hold a meeting on Dec. 12 to review Indonesia's economic reform programs and to decide on the date of the next disbursement of its bailout money for the country, according to Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita.

Ginandjar said on Monday that the current political situation would not cause the agency to delay the aid disbursement.

"There hasn't been any delay, since the beginning the schedule has been like that," he told reporters after a meeting with several economic ministers.

He explained that the disbursement decision was extended to Dec. 12 because the disbursement scheduled for the end of October was prolonged to November.

"So it's only a technical problem, nothing else," he added.

IMF Asia-Pacific director Hubert Neiss led the monthly review of Indonesia's economic reform programs in early November, during which the agency was encouraged by the progress the government had made in overcoming the economic crisis.

This review is expected to be reevaluated by the agency's executive board in December, after which another disbursement of about US$1 billion should be released.

The IMF pledged some $11.3 billion in loans of the more than $42 billion bailout package promised together with other multilateral and bilateral lenders to finance the country's economic reform programs designed to fix its worst economic crisis in three decades.

The agency had so far released some $8 billion of the first line of defense loan it promised.

Subsequent IMF reviews will no longer be held on a monthly basis but will take place every two months, reflecting Indonesia's improving economy.

The IMF arranged the bailout fund in October last year after the country's currency and financial sector collapsed in the wake of the Asian financial crisis, which began in Thailand in July.

The economic conditions worsened in May this year when political and economic chaos ended the 32-year rule of former president Soeharto, prompting the IMF to temporarily freeze the loan payments.

The disbursements resumed in July, and donors agreed to continue their support to the new government of President B.J. Habibie.

Political unrest has continued throughout the country in the last month, the deadliest clashes being between students and security officials on Nov. 13 followed by racial rioting in Jakarta, but the economy appears to have ridden out the storm. (rei)