Top economic authorities to hold overseas road shows

Evi Mariani, The Jakarta Post, Jakarta

Three of the country's top economic officials will begin a road show on Wednesday that will take them to the world financial centers of New York, London and Dubai.

The road show is part of efforts to maintain investor confidence in the economy, particularly after the International Monetary's economic bailout program ends later this year.

The officials are Bank Indonesia Governor Burhanuddin Abdullah, Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti and Minister of Finance Boediono.

Burhanuddin said on Tuesday they would try to brief international investors about the latest progress in the country's economy, and about the government's post-IMF economic reform program.

After a delay of a month, the government late on Monday revealed the reform program in a white paper.

The post-IMF program covers three main areas: maintaining macroeconomic stability, continuing financial sector reform and increasing investment, export and job opportunities. The white paper is a matrix of various programs to be implemented by the government in the remainder of this year and next year.

Indonesia entered the IMF bailout program in late-1997 following regional financial crisis. Since then, the government has had to issue a set of reforms approved by the IMF every quarter in exchange for the fund's money.

After the program ends, the government will be free to design its own reforms without intervention from the IMF.

"We are also scheduled to meet with international credit rating agencies like Moody's, S&P (Standard&Poors) and Fitch IBCA," Burhanuddin said of the road show. "We hope the agencies can upgrade our debt rating."

Indonesia's current debt rating is triple B-, or below investment grade. The higher the rating, the lower the cost of borrowing for a country.

Indonesia has seen improved macroeconomic stability over the past year as inflation has gone down, the rupiah strengthened and interest rates fallen, raising hopes that the country's sovereign rating will be upgraded.

Late last month, Boediono said a government team would fly to Dubai in September for the International Monetary and Finance Committee (IMFC) forum scheduled for Sept. 22 there. The team will promote the country's planned US$400 million international bond offering, which is crucial for helping to finance the state budget.

After leaving the IMF program, Indonesia will no longer be eligible for debt rescheduling facilities from the Paris Club of creditor nations, creating a new burden for the budget.

Burhanuddin said he was optimistic the overseas road show would be a successful.

"I think the contents of the white paper will be just fine (with investors)," he said. "The success will depend on the way we convince them (investors)."