IMF to meet with government in Jakarta next week

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)