Rizal upbeat IMF, govt will reach deal
Rizal upbeat IMF, govt will reach deal
JAKARTA (JP): Coordinating Minister for the Economy Rizal
Ramli said on Tuesday he was confident the government would be
able to reach an agreement with the International Monetary Fund
soon.
"I'm confident that our government and the IMF will reach an
agreement soon," Rizal said in a press statement.
"I am visiting Washington D.C. to further discuss our
government's position on the amendments to the central bank law,
and the remaining measures concerning (fiscal) decentralization
and corporate restructuring," he added.
Rizal left Jakarta late on Monday for Washington to meet IMF
first deputy managing director Stanley Fischer and U.S. Treasury
Secretary Paul O'Neill.
Government relations with the IMF have been strained by a
delay in the disbursement of the Fund's third loan tranche of
US$400 million late last year.
The Fund made the delay after the government failed to
implement its promise to sell ownership in Bank Central Asia and
Bank Niaga in December, and to address concerns over the new
fiscal decentralization policy and proposed amendments to the
central bank law.
The IMF promised the current administration some $5 billion in
bailout loans in January last year. It has so far disbursed
around $1 billion. The disbursement of the Fund's money is seen
as a key factor to help maintain investors confidence in the
ailing economy.
There have also been worries that the Paris Club of creditor
nations would cancel the restructuring of some $2.8 billion of
Indonesian official debts maturing this year if the IMF continued
to delay its loan to Indonesia.
Last week Rizal complained that the IMF had been pressing too
hard, saying it was difficult to implement every reform while the
country was going through its complex transition to democracy.
The IMF has expressed concern over the government proposed
amendment of the central bank law, saying it could undermine the
independence of Bank Indonesia.
Critics have said that the planned amendment was merely
designed to accommodate the wish of President Abdurrahman Wahid
to dismiss Bank Indonesia Governor Sjahril Sabirin and his
deputies.
But Rizal has often said that the amendment was needed to
boost the accountability of Bank Indonesia amid alleged rampant
corruption at the central bank in the past.
The IMF has also demanded the government issue a special
ruling prohibiting provincial and district administrations from
borrowing both overseas and domestically to prevent a borrowing
spree following the implementation of the new fiscal
decentralization policy.
But Rizal has said that the government couldn't totally ban
regions from borrowing because the law allows them to make debts
under strict conditions to help finance their greater powers of
autonomy.
Rizal left for Washington only two days after Abdurrahman's
four foreign advisers, who met with the President over the
weekend, urged the government to mend its ties with the IMF and
to stick to the reform agenda already agreed with the
multilateral agency.
"We believe Indonesia is poised at a critical juncture. It
must build on a year of promising, yet still highly fragile and
incomplete, economic recovery," the advisers said in a memo to
Abdurrahman which was released on Tuesday.
"That effort would be surely jeopardized -- indeed made
fruitless -- by failure to address certain issues, some chronic,
some new," they added.
The advisers also recommended a withdrawal of the planned
amendment of the central bank law.
"We would recommend that you allow a period of review and
reconsideration, including withdrawal of present legislation,"
they said.
One of the controversial points in the amendment of the
central bank law is the possibility of senior politicians being
appointed as members of Bank Indonesia's board of governors.
The proposed bill is currently being debated by the House of
Representatives special team.
Separately, some legislators said on Tuesday that the
government should reconsider withdrawing the planned amendment of
the central bank law due to current unfavorable development.
"Our faction thinks that the amendment is not a very urgent
matter," said legislator Faisal Baasir of the United Development
Party.
He pointed out that the government should instead focus now on
efforts to recover the ailing economy, particularly bank and
corporate restructuring programs.
Paskah Suzetta, spokesman of the Golkar Party, said that he
would also approve if the government decided to stop the
amendment process.
But legislator Rizal Djalil of the Reform Faction warned that
the government would be "politically humiliated" if it withdrew
itself from the initial commitment to amend the central bank law.
"I demand the IMF to stay out. They must not interfere," he
said. (rei)