IMF to meet with government in Jakarta next week

JAKARTA (JP): The International Monetary Fund reasserted its demand on Monday for the full disclosure of the results of the investigations into the Bank Bali scandal but said it would nevertheless hold technical discussions with government and economists of major political parties in Jakarta next week.

The IMF said in a statement released from Washington that it had received requests from the Indonesian government and opposition party officials for joint talks on the possible shape of economic policy in the wake of the Oct.20 presidential elections.

It added that the discussions will involve technical economic experts drawn from a wide range of institutions, including the government, the major political parties, universities and other economic institutions.

"This effort is aimed at developing a consensus on the macroeconomic framework that should guide policy in the period ahead, as well as on the design of major supporting structural policies," the Fund said.

"It is expected that the World Bank and the Asian Development Bank will join in these technical discussions," it added.

But the IMF still insisted that any resumption of IMF lending to Indonesia still hinges on the release of a report by PriceWaterhouseCoopers (PwC) investigation into alleged political corruption stemming from the Bank Bali case.

The IMF said while the technical discussions should facilitate the eventual resumption of the IMF program it is still waiting for the release of the full PwC report.

PwC has investigated allegations that around $80 million was illegally transferred out of accounts at Bank Bali in June to a private company controlled by a deputy treasurer of the ruling Golkar Party.

However, the Supreme Audit Agency which ordered the PwC special audit, refused to release the full report on the audit results, invoking the bank secrecy code as the excuse.

IMF has therefore decided to suspend consideration of the next $460 million tranche under its $12.1 billion loan program which is part of the $43 billion Indonesian bailout fund.

In strongly worded letters to Habibie and his senior economic minister last month, as quoted by the Asian Wall Street Journal on Monday, IMF executives said the Bank Bali scandal has undermined international confidence in Indonesia and jeopardized continued financial support from donor countries and the IMF.

"I am convinced the only way forward is to remove the continuing obstacles to a full and independent investigation, make the results of the investigation public and initiate an appropriate government response to the results," IMF Managing Director Michel Camdessus said in a Sept.9 letter to Habibie. (vin)