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IMF top official returns to Jakarta to discuss new aid

JAKARTA, July 22 Kyodo

Hubert Neiss, Asia-Pacific director of the International Monetary Fund (IMF), arrived here Wednesday afternoon for a two-week visit to discuss 6 billion U.S. dollars in loans approved for Indonesia by the IMF's executive board last week.

The money is in addition to the 41.2 billion dollar international bailout package already in place to help restore Indonesia's economy.

"I'm here for the next monthly review of the economic program," Neiss told reporters upon arrival at a Jakarta airport.

The IMF agreed to resume loan payments to Indonesia last week, after suspending them in the wake of riots in Jakarta in May which led to the resignation of former President Suharto.

It agreed to release immediately the next tranche of aid worth 1 billion dollars to Indonesia which Neiss had earlier said would be disbursed in the second half of August.

"In this initial stage of the crisis, we will have monthly reviews, so there will be more to come," Neiss said. "Every month, there will be a review and every month a billion (dollars) will be disbursed. That goes through at least to December."

Neiss said his visit will concentrate on three main items, namely distributing essential goods to the public, making the banking system functional and dealing with the large domestic debt weighing down corporations.

"These (are) the programs we will finish soon and we will go to (the IMF central executive) board again sometime in the second half of August," he said.

Ginandjar Kartasasmita, coordinating minister of economy, finance and industry, said early this week the 1 billion dollar portion which Indonesia will receive in August will be used to strengthen the country's balance of payments and cover state budget deficits.

Indonesia will also receive 1 billion dollars in additional loans each from the World Bank and the Asian Development Bank, as well as bilateral aid from other countries.

Japan will provide 1 billion dollars in fresh loans, Australia 300 million dollars and China 300 million dollars.
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Publication:Asian Economic News
Date:Jul 27, 1998
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