IMF to disburse loan by the end of August: Akbar

IMF to disburse loan by the end of August: Akbar

JAKARTA (JP): The International Monetary Fund (IMF) said it
expected to disburse its stalled US$400 million loan tranche to
Indonesia by the end of August, House of Representatives Speaker
Akbar Tandjung claimed on Wednesday.

"Mr. Anoop Singh said the disbursement would be effected
sometime late in August," Akbar said referring to the visiting
IMF Asia Pacific deputy director, who made a courtesy call on the
House speaker.

Most analysts have predicted that the IMF would not make any
decision until after the special session of the People's
Consultative Assembly beginning on Aug.1.

The Assembly is widely expected to withdraw President
Abdurrahman Wahid's mandate, and a new government is predicted to
emerge sometime in mid-August.

Akbar said the IMF made no reference to the special session.

"But they did ask me about the political situation, which I
clarified to them briefly," he said.

Akbar added that he explained to the IMF about the Assembly's
special session and how it could help restore political
stability.

Analysts have said that the IMF is likely to defer the loan
disbursement until some of the current political uncertainties
have been cleared up.

Should a new president be elected, questions will surface over
the lineup of the next cabinet and the ministers to be placed in
charge of the economy.

Coordinating Minister for the Economy Burhanuddin Abdullah
said earlier that he expected a new letter of intent (LoI) to be
signed within the week, citing Friday or Saturday as the possible
day of signing.

The LoI will contain a set of economic reform targets
Indonesia must meet to ensure the continuation of the IMF's
financial aid.

Following the signing of the LoI, the IMF team will head back
to Washington to submit the document to the IMF executive board
for approval, a process that usually takes about two to three
weeks.

But IMF First Deputy Managing Director Stanley Fischer said in
Tokyo that political and economic instability made it too early
to say whether a loan disbursement was possible next month.

"What Burhanuddin says is entirely possible ... not certain by
any means because of the potential instability," Fischer was
quoted as saying by Dow Jones.

According to him, slow bank and corporate sector restructuring
remained a major concern.

Akbar went on to say that the IMF did not specifically mention
when they expected a new LoI to be signed.

"But it is most likely that they (the IMF) will complete their
work later this week," he claimed.

He said the IMF told him that the latest LoI would cover no
new items and was essentially identical to the current one which
was signed in September.

"They are discussing the old LoI again, and it appears that
there won't be many differences in terms of substance," he said.

Akbar added that the IMF had confirmed to him that the new LoI
contained fewer reform targets, as hinted at earlier by
government officials.(bkm)