BACK

 

����������������������������

 

 

 

 

American Indonesian

Chamber of Commerce

�for business and understanding�

 

To: All Members and Friends

From: Wayne Forrest, Executive Director

 

Indonesia Signs New LOI with IMF

 

AICC received this today from the office of Coordinating Minister for the Economy, Dorodjatun Kuntjoro-Jakti:

 

" The Coordinating Minister for Economic Affairs, the Minister of Finance and the Governor of Bank Indonesia today signed a letter to the International Monetary Fund (IMF). The signing, which was witnessed by the Senior Resident Representative of the IMF in Jakarta, reflects the� understandings reached by the Government and the IMF on the updates of the economic programs described in the Memorandum of Economic and Financial Policies (MEFP) of December 13, 2001. A successful IMF Executive Board meeting to review the program will enable a further drawing of SDR 275 million (about $340 million) under the program.

 The letter reiterates the Government�s firm commitment to restore medium-term fiscal sustainability based on the success to contain the budget deficit within the target of 3.7 percent of GDP in 2001. It also reports that monetary policy is on track.

 The government highlights the important progress that has been made with the divestiture of the government�s holdings in the banking system. The sale of bank BCA to a strong strategic partner was concluded. IBRA also launched the sale of bank Niaga on February 11, 2002, while the resolution strategy for bank BII is also mentioned in the letter.

 In the key area of asset recoveries, IBRA has formalized its strategy for 2002 and published its quarterly cash recovery targets. On privatization, the government has finalized and published its program for 2002. As part of the asset recovery effort, the government decided on a strategy to resolve the long-standing problem of shareholder settlement agreements with former bank owners. The government is committed to take strong actions against those former owners who fail to come into compliance with their obligations.

 �The letter will lead to the next IMF tranche to Indonesia as a result of the Fund�s Executive Board meeting which expected to be taken place later this month,� stated the Coordinating Minister Dorodjatun Kuntjoro-Jakti. Furthermore, the Minister hopes the Paris Club meeting scheduled this week will see this as a significant progress of the government�s commitment toward economic reforms."

Next Event

AICC is hosting Robert Gelbard, former Ambassador to Indonesia on April 16 from 12-2 at the Yale Club of NY.  Asia Society is collaborating on the event and there are still seats available.  Sign up on line at http://www.aiccusa.org/events.html or call (212) 687-4505.