Tue, 30 May 2000

New IMF boss Koehler to visit Jakarta

JAKARTA (JP): International Monetary Fund managing director Horst Koehler is scheduled to visit Jakarta on Sunday to examine the implementation of the country's economic reform measures.

Finance minister Bambang Sudibyo confirmed on Monday the planned visit.

"It'll will be just a regular visit ... My schedule is to have dinner with him," he told reporters when asked about the visit.

Bambang added that Koehler wanted to check whether Indonesia implemented its key economic measures by the May deadline.

He did not provide details.

The IMF is sponsoring the country's three-year economic reform program. The fund promised the newly appointed administration of President Abdurrahman Wahid in January a further US$5 billion from a bailout arrangement.

The IMF is expected to disburse some $400 million in new loans to the country early next month after its board of directors approved the country's new letter of intent agreed with the fund's visiting review team earlier this month.

The loan was supposed to have been disbursed in April, but was delayed due to the government's slow progress in the implementation of key reform programs.

Koehler, a German, was appointed the organization's managing director in March.

The 57-year-old is a former top official in Germany's finance ministry and headed the London-based European Bank for Reconstruction and Development beginning in 1998.

Indonesia first signed a bailout agreement with the IMF in November 1997 as the country plunged into its worst economic crisis in three decades.

The country has lagged behind other crisis-hit nations, including Malaysia which did not seek IMF assistance.

The fund urged the Indonesian government to accelerate its banking and corporate reform programs to spur economic recovery.

The continuing weakening of the rupiah to the U.S. dollar is now seen as a major threat to the progress of the two key reform programs.

The rupiah has been under strong pressure, particularly due to domestic political uncertainty.(rei)