Indonesia hopeful on prospects for IMF talks

Indonesia hopeful on prospects for IMF talks

WASHINGTON (Reuters): Indonesia's Foreign Minister Alwi Shihab
said on Monday he was hopeful about the prospects for progress in
talks with the International Monetary Fund over a crucial US$400
million loan.

In an interview with Reuters, Shihab blamed Indonesia's
parliament for creating some of the delays in introducing reforms
which in turn have stalled discussions with the IMF.

"We sometimes have difficulties in convincing our parliament,
so the delay sometimes is not because of the government but
because of the parliament...," Shihab said.

"But so far I am confident that the IMF is quite reasonable
and understanding of the situation. So I am hopeful that they
will resume activities (and) return to Indonesia to ... resume
discussion," he said.

IMF head of external relations Tom Dawson told a news briefing
on Monday that the Washington-based lender would continue to have
useful discussions with Indonesian officials, but added major
issues needed to be overcome.

"We do expect future discussions will be held and are hopeful
for additional progress," Dawson said, adding that the situation
had not changed substantially in recent weeks.

The loan, part of a $5 billion facility, has been delayed
since December while negotiations dragged on over issues such as
the independence of Indonesia's central bank, borrowing by
regional governments and transparency in asset sales.
Progress in these talks is needed for the IMF to take the next
step by sending a mission to Jakarta.

Shihab would not hazard a guess on when such a mission might
be sent, and Dawson also said no date had been set.

This is the third time in the past year that the IMF has
delayed loans from the three-year program as Indonesia struggles
with economic reforms and a series of political crises.

Without IMF backing, Indonesia will have trouble with its key
donors, such as the Paris Club of official creditors, and
confidence in the economy would further erode.

Indonesian officials have kept an optimistic face on the
prospects for a breakthrough, however.

On Friday, a senior official at Indonesia's chief economics
ministry told reporters he expected that the outstanding issues
would be resolved in March, and added that an IMF team would
arrive in Jakarta "soon."

Shihab was in Washington to meet U.S. officials, including
Secretary of State Colin Powell, and attend a day-long conference
of the U.S.-Indonesia Society on Tuesday on Capitol Hill.