Reform deadlines met: Minister

Reform deadlines met: Minister

JAKARTA (JP): Indonesia has implemented all the reforms due
this week under deadlines agreed with the International Monetary
Fund (IMF), Coordinating Minister for Finance, Economy and
Industry Ginandjar Kartasasmita said yesterday.

The minister said all reforms that had to be undertaken by
April 22, and some due by April 24, had been introduced.

The government fully realized that the country's economic
recovery depended entirely on the consistency and commitment with
which the reform program was pursued, he added.

"It is true that it is not easy to change regulations and
habits that have been in place for a long time, but we are
determined to implement all reforms necessary to overcome the
economic and monetary crisis and restore the development
process," Ginandjar said at a meeting of the Economic and
Monetary Resilience Council at the Bina Graha presidential
office.

The meeting, chaired by President Soeharto, was attended by
all council members including Minister of Finance Fuad Bawazier,
Minister of Industry and Trade Mohamad "Bob" Hasan, State
Minister for the Empowerment of State Enterprises Tanri Abeng,
Bank Indonesia Governor Sjahril Sabirin, secretary general of the
council Anthony Salim, and government economic advisors Widjojo
Nitisastro and Radius Prawiro.

They discussed progress with the additional package of reforms
agreed with the International Monetary Fund (IMF) early this
month. Indonesia agreed to implements a 50-point program of
reforms in January in exchange for US$43 billion in loans from
the IMF.

At the media conference Ginandjar disclosed the reforms
successfully implemented by their April deadlines. They are as
follows:

* set minimum capital requirements for banks to Rp 250 billion
by the end of 1998, after loan loss provisions.

* make loan loss provisions fully tax deductible, after tax
verification.

* publish key monetary data on a weekly basis.

* establish a preparatory committee to prepare a central bank
bill.

* transfer claims resulting from past liquidity support from
Bank Indonesia to the Indonesian Bank Restructuring Agency
(IBRA), and take the first steps to reduce export taxes on logs,
sawn timber, rattan and minerals.

* remove the ban on palm oil exports and replace it with an
export tax of 40 percent.

* lift restrictions on foreign investment in wholesale trade.

* establish a monitoring system for structural reform.

* amend the bankruptcy law.

* announce seven state enterprises to be privatized in
1998/1999.

Ginandjar pointed out that efforts to restore international
confidence in the economy had shown encouraging progress and the
rupiah had appreciated significantly against the U.S. dollar
since the new Cabinet was installed on March 17.

"This shows that confidence in the rupiah and in our economy
is gradually recovering. We hope the rupiah will continue to
strengthen," the minister added.

An IMF official assured Ginandjar yesterday morning that its
board meeting scheduled for May 4 would go ahead. The meeting
will decide whether or not to disburse the second US$3 billion
installment of the rescue package.

The World Bank will soon decide whether or not it will release
US$1 billion of the US$4.5 billion which it pledged. The Asian
Development Bank (ADB) has also yet to decide when it will hand
over US$1.5 billion of the total US$3.5 billion promised.

"Japan and Australia pledged to give bilateral assistance,
worth US$1 billion and US$300 million respectively, to strengthen
our foreign exchange reserves," Ginandjar added.

Radius said a new round of negotiations to settle the
country's US$68 billion corporate debt would be held from May 8
to May 10 in Tokyo.

The meeting will be attended by all members of the Indonesian
Bank Steering Committee which represents creditors and debtors.

"IMF Deputy Managing Director Stanley Fischer, Fuad and
Sjahril are also expected to be present at the opening ceremony,"
Radius said.

Tanri officially named the seven state firms to be privatized
during this fiscal year and the five listed firms in which the
government will reduce its stake.

The firms to be privatized include port management companies
PT Pelindo I and PT Pelindo II, palm oil plantation firm PT
Perkebunan Nusantara IV, toll road construction company PT Jasa
Marga, coal mining company PT Tambang Batubara Bukit Asam, steel
maker PT Krakatau Steel and airport management firm PT Angkasa
Pura II.

The listed companies in which the government will reduce its
stake include PT Telkom, PT Indosat, PT Semen Gresik, nickel and
gold mining company PT Aneka Tambang and mining firm PT Tambang
Timah.

"We expect to generate Rp 15 trillion from the privatization
program," Tanri added. (prb)