Terror strike to change RI reform targets: IMF

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.