IMF team to visit Jakarta on new LoI talks
IMF team to visit Jakarta on new LoI talks
Berni K. Moestafa, The Jakarta Post, Jakarta
A team of the International Monetary Fund (IMF) is scheduled
to arrive in Jakarta later this week for preliminary talks on the
upcoming letter of intent (LoI) with the government, the IMF said
on Monday.
"The discussion with the (Indonesian) authorities for the
fourth review will center around the macroeconomic framework for
2002, a review of policy developments on the issue in the August
letter of intent and key economic and structural reforms for
2002," the IMF's senior resident representative in Indonesia,
David C. Nellor, was quoted as saying by Dow Jones wire service.
While in Jakarta, the team will meet economics ministers, and
officials of Bank Indonesia and the Indonesian Bank Restructuring
Agency (IBRA), he said.
The IMF team's arrival will come at a time when the government
is scrambling to meet the targets it promised the fund in the
Lol signed in August.
They include privatization proceeds of Rp 6.5 trillion (about
US$596 million), of which none has been raised.
The government's hopes of raising Rp 5 trillion from divesting
its shares in PT Semen Gresik may be dashed over locals opposing
the sale.
IBRA's asset sales target also appears at risk, with questions
lingering over the sale of PT Bank Central Asia (BCA) on time.
Analyst have described the sale of BCA and Semen Gresik as a
litmus test on Indonesia's ability to push ahead with
privatization.
Exacerbating this difficulty is the diminishing foreign
investors' appetite for Indonesian assets in the wake of the
Sept. 11 terrorist attacks in the United States.
Last year, the IMF withheld a $400 million loan tranche to
Indonesia on signs of the country faltering on targets, including
BCA's sale.
Proceeds from IBRA's asset sales and privatization is expected
to help cover this year's state budget deficit of some Rp 51
trillion.
Other LoI targets at risk include performance in the monetary
sector, which is feeling the brunt of the global downturn.
The LoI targets are already downgraded versions of the
original ones under the LoI signed in September last year.
The revisions followed nearly seven months of political
turmoil preceding president Abdurrahman Wahid's ouster, which had
crippled effective decision-making by the government.
Nellor further said that the IMF team would also attend
Wednesday's meeting of the Consultative Group on Indonesia (CGI).
The CGI groups together Indonesia's major donors, and their
meeting in Jakarta will discuss ways for further loan support.