World Bank welcomes new economics team

JAKARTA (JP): The World Bank welcomed on Thursday the country's new economics team, saying that they expected to be able to work closely with it to resolve the various economic problems plaguing the nation.

"It is a very promising economics team. It should be well- received by the financial markets," World Bank country director for Indonesia Mark Baird said.

Baird praised the economics team as it combined professional experience and technocratic expertise.

The World Bank is the country's largest foreign creditor. One of the main items on the agenda of the new economics team will be to immediately meet with the Paris Club of creditor nations to reschedule the country's US$2.8 billion in sovereign debt maturing this year. The rescheduling facility is crucial for the country to avoid a fiscal disaster. The Bank is the coordinator of the Paris Club.

The Paris Club has said that the government must secure a new deal with the International Monetary Fund (IMF) as a condition for obtaining the debt rescheduling facility.

The new IMF Jakarta representative, David Nellor, could not be reached for comment. "He will make his comments after meeting with the new team," said an official at the IMF Jakarta office, adding that the meeting would probably take place next week.

Economists, however, are optimistic that the new economics team will boost the country's relations with the IMF, which deteriorated under the administration of former president Abdurrahman Wahid.

The appointments of outgoing Indonesian Ambassador to the U.S. Dorodjatun Kuntjoro-Jakti as the coordinating minister for the economy, and former head of the National Development Planning Board (Bappenas) Boediono as finance minister are seen by analysts as a perfect choice.

Analysts have said that Dorodjatun's experience in Washington should give him an edge in negotiating and communicating with both the World Bank and the IMF.

Boediono also has experience in dealing with the multilateral agencies when he led Bappenas during the administration of B.J. Habibie.

Analysts have also said that Dorodjatun, Boediono and the other members of the economic team were considered as highly credible and capable people.

The IMF halted the disbursement of its $400 million loan tranche to the country late last year amid signs that the Abdurrahman's administration was wavering with the implementation of a promised economic reform program.

The new government is expected to sign a new Letter of Intent (LoI) with the IMF later this month or early next month.

An LoI is basically a set of economic programs to be implemented by the government. (rei)