IMF team kick starts its review on RI economy
The Jakarta Post, Jakarta
An International Monetary Fund (IMF) team has started its mission to review the country's economic reform progress and to set out new targets, both of which will be outlined in the proposed eighth letter of intent (LoI), a government official said.
Mahendra Siregar, a senior adviser at the economic ministry, said on Monday that the visiting team would be making its economic assessment in a series of meetings with the government, in a week-long process.
Completion of the review would lead to signing of the latest LoI, which would then be sent to the IMF's board of executives in Washington, Mahendra added, as reported by Dow Jones.
The LoI refers to the country's key economic reform programs and several time-bound targets that the government has to meet quarterly in return for disbursement of another tranche of the IMF loan.
The last disbursement, amounting to US$ 365 million, was made in December, to bring the total loans the country has taken out so far to around $3 billion, from a total loan package of $4.8 billion agreed to between the government and the IMF.
Mahendra did not provide details of the discussion.
However, this review will be of great significance, given that the fund's assistance to the country is now entering the final year of the bail-out program. Signed in 1999, the program was originally planned to end in December 2002, but was extended for another year.
As a preliminary preparation, the government said earlier that a special team would be set up sometime soon to review the results of reform programs the government had carried out in agreement with the fund.
The team will be tasked to explore the possibility of whether Indonesia is financially competent without support from the international community, Minister of Finance Boediono has said.
Therefore, an assessment on whether the country still needed an umbrella to boost international confidence would also be carried out by the team.
The government plans to seek approval on this from the House of Representatives and economic experts later this month.
Involvement of the IMF in the first place was meant to help Indonesia's economy get back on the recovery track after being severely hit by the massive storms of the 1997 financial crisis.
The IMF assistance has not only benefited the country in terms of financial aid, but also in terms of gaining support from other foreign countries and institutions, whose judgments on Indonesia's economy are often based on the IMF's assessment.
The latest IMF review also precedes a meeting planned next week in Bali by international lenders, led by the World Bank. The lenders, known as the Consultative Group on Indonesia (CGI), are expected to pledge over $3 billion in fresh loans to Indonesia to support the 2003 state budget.