Terror strike to change RI reform targets: IMF
The Jakarta Post, Jakarta
The International Monetary Fund (IMF) and the government will evaluate the impact of the recent Bali blasts on the economy, with one IMF senior official admitting the possibility of changing the targets under Indonesia's economic reform program.
A spokesman for the Office of the Coordinating Minister for the Economy, Mahendra Siregar, said on Tuesday the government would work with the IMF and the World Bank to assess the impact last week's terrorist strike had on the economy.
"We met the IMF and the World Bank immediately after the attack," he said. "Both offered help and in this context we will study the implication (of the terrorist strike) on the economy."
The weekend bomb explosions in Bali destroyed two popular nightclubs on the island, killing at least 183 people, most of whom were foreigners.
Economists now fear an overall weakening of the economy led by a dive in the tourist sector and a worsening outflow of capital.
The rupiah and the stock market, although slightly rebounding in Tuesday trading, plunged to new lows on Monday during panic selling.
"We will work together with our partners in the international community to offer whatever support possible to the government of Indonesia at this difficult time," said a senior IMF official who declined to be named.
He added, though, that so far the Bali attack had no impact on the time frame of the IMF's delayed loan disbursement, explaining that Indonesia needed to meet its reform targets first.
The terror strike came at a time when the IMF is holding back around $360 million in loans until Jakarta catches up on several reform targets, mainly those under its state asset sales program.
Analysts said many of these targets would now be harder to meet amid heightened investors' aversion toward Indonesian assets.
"With the goal of identifying policy adjustments called for by the changed circumstances, we are working closely with the government in assessing the economic implications of this development," said the IMF official.
Asked whether the assessment could later call for changes to the reform target, he answered that it was possible.
The official, however, emphasized that this would depend on the outcome of the assessment, with spokesman Mahendra adding that talks with the IMF had not touched upon reform targets as yet.
"Generally, the privatization and divestment programs will remain, although some parts might change depending on the market situation," Mahendra said.
Deputy State Minister for State Enterprises Mahmudin Yasin said the government might need to first take account of changes in the values of state companies since the attack before selling them. Otherwise, he said, the privatization program would proceed as planned.