RI fails to meet LoI terms

RI fails to meet LoI terms

Again, the Indonesian government is being deemed unable to meet its own commitments as contained in the sixth letter of intent (LoI), which it signed with the International Monetary Fund (IMF).

This failure will disrupt the schedule for disbursement of the next tranche of an IMF loan of some US$400 million to Indonesia. Disbursement of the loan has become a yardstick for international trust in this country. Failure to implement the LoI will also hamper the approval of new loans to Indonesia from the Consultative Group on Indonesia (CGI). These loans are needed as our state budget is under pressure.

The government must realize that, like it or not, the LoI program of the IMF has become a precondition for the rescheduling of Indonesia's loans from the Paris Club. In CGI, the IMF is influential because the main stakeholders of this organization are the most influential creditor countries within CGI.

To be honest, not all programs required by the IMF are bad. The anticorruption commission, for example, is a good idea.

Regrettably, in the case of some LoI programs needing House of Representatives (DPR) approval, the House has often intervened too deeply, sadly, in pursuit of narrow political or personal interests.

-- Investor Indonesia