IMF to disburse loan to Indonesia soon

IMF to disburse loan to Indonesia soon

JAKARTA (JP): The International Monetary Fund (IMF) is
expected to disburse US$400 million in loans to Indonesia later
this month, according to Cabinet Secretary Marsillam Simanjuntak.

Marsillam said on Saturday an IMF team would come to Jakarta
on April 21 to review the implementation of economic reform
programs promised by the government in January.

He said that the result of the review would be sent to the IMF
executive board at its headquarters in Washington to decide on
the second-tranche disbursement from the IMF $5 billion bailout
fund for Indonesia for the 2000-2002 period.

"We hope that one week after the visit of the review team, the
IMF will disburse the money," Marsillam said following a meeting
with President Abdurrahman Wahid.

However, the IMF chief representative in Jakarta, John
Dodsworth, said late last month that even though the review could
be completed in the first half of April, the second disbursement
of loans would probably take place only in mid-May at the
soonest.

"After the review, it needs about three weeks until the IMF
executive board in Washington can meet," Dodsworth said in
explaining the delay.

The IMF was meant to disburse the aid on April 4 on condition
that the government had implemented all the economic reform
measures it promised in January by the end-March deadline.

The key economic programs to be implemented are contained in a
letter of intent sent to the IMF.

But the government failed to meet the March 31 deadline for
some 108 "items" in the letter, prompting the IMF to delay the
aid disbursement.

The government proposed last week new deadlines of April 8 and
April 12 for 42 items demanded by the IMF as a prerequisite for
the aid disbursement.

IMF Jakarta chief representative John Dodsworth said last week
that the Fund would disburse the money in May if the government
could meet the new deadlines.

Marsillam said that Coordinating Minister for Economy, Finance
and Industry Kwik Kian Gie handed over to the President on Friday
evening a document reporting that the 42 items of the letter had
been implemented.

"I don't know how many items exactly, but I think all have
been implemented because without this the government team could
not leave for Paris," he said.

A delegation of senior government officials and Presidential
economic advisers left Jakarta on Saturday for Paris to attend
the April 12 to April 13 meeting of the Paris Club creditor
nations grouping.

The government has proposed to reschedule some $2.1 billion in
sovereign debts to the grouping to help ease the pressure on the
2000 state budget.

Completing the economic reform programs will provide Indonesia
with key IMF support for the approval of its debt rescheduling
proposal to the creditors grouping.

The Indonesian delegation will be led by Kwik and Finance
Minister Bambang Sudibyo.

Marsillam said that the IMF review team was supposed to come
to Jakarta on April 30, but it decided to move the visit forward
to April 21.

Marsillam did not explain why the schedule was changed.

Reports that the government had failed to meet the IMF
deadlines had caused a serious blow to confidence in the country
as reflected from the declining of the value of the rupiah
against the U.S. dollar last week, which plunged to near the Rp
8,000 per dollar level, compared to Rp 7,400 last month.

But Bank Indonesia Governor Sjahril Sabirin said on Friday
that he expected the rupiah to strengthen again once the IMF
released its money.

Several senior government officials had said earlier on Friday
that many parts of the 42 items in the letter had been completed.

State Minister for Investment and the Development of State
Enterprises Laksamana Sukardi said that programs related with the
Jakarta Initiative Task Force had already been completed.

The task force is a corporate debt restructuring agency
established by the government in early 1998 to break the impasse
between local debtors and (mostly) foreign creditors.

The Indonesian Bank Restructuring Agency's chairman, Cacuk
Sudarijanto, said that it had completed nine out of 14 programs
related to the agency.

The $400 million IMF loan is part of a $5 billion loan
promised by the fund to the newly formed administration of
President Abdurrahman to help finance the country's new economic
reform programs over the next three years. (rei)