Neiss optimistic a new government will continue reforms
Neiss optimistic a new government will continue reforms
JAKARTA (JP): International Monetary Fund Asia Pacific
director Hubert Neiss is confident the new government formed
after the upcoming elections will remain committed to economic
reform.
Neiss said on Tuesday he had some knowledge of the political
platforms of the major opposition parties from recent meetings
with party leaders.
"I'm optimistic the new government will implement all the
reform packages," he said before meeting with Coordinating
Minister for Economy, Finance and Industry Ginandjar
Kartasasmita.
He said the party leaders were dedicated to the reform
programs sponsored by the IMF.
Indonesia is scheduled to hold a general election on June 7,
which will be followed in November by the election of the
country's president and vice president by the newly formed
People's Consultative Assembly.
Some investors are worried key economic reform programs will
be discarded by the newly formed administration because many
opposition leaders have criticized the programs.
Neiss arrived in Jakarta on Monday for a bimonthly review of
the country's economic reform programs.
The IMF is organizing a US$43 billion dollar bailout package,
pieced together with other multilateral agencies in November
1997, to help lift Indonesia out of its worst economic crisis in
three decades.
Out of the IMF's $12.2 billion loan commitment to Indonesia,
it has released some $9.5 billion.
The completion of this week's review is expected to pave the
way for the disbursement of some $460 million.
Together with the disbursement of the Japanese Miyazawa aid,
Indonesia will receive a total of some $1 billion in aid.
Neiss said on Monday the review would focus on the recovery of
state banks' bad assets.
He said both the IMF and the government would discuss new
strategies to deal with debtors at state banks.
The Indonesian Bank Restructuring Agency has assumed over Rp
100 trillion in nonperforming loans from the country's seven
state banks.
In a recent letter of intent to the IMF, the government was to
offer measures to restructure the debts of the 20 largest debtors
at the state banks. Their debts were to be either restructured or
liquidated.
The 20 largest debtors are companies owned by well-connected
businessmen, including a number of former president Soeharto's
children.
"The IMF will take a more stern approach to push the debtors
to repay their debts," said a government source.
He added that Neiss was scheduled to meet President B.J.
Habibie on Wednesday.
The recovery of the bad loans would help finance the
government's bank recapitalization program, which is estimated to
cost some Rp 500 trillion. (rei/prb)