2001年-世界发展银行全球_Indonesia___The_Imperative_for_Reform_124页_6mb

Summary of the Report on Indonesia's Economic Recovery and Reform

Core Content

This report, authored by the Consultative Group on Indonesia (CGI) and led by Vikram Nehru, evaluates Indonesia's economic performance and outlines key reform priorities for the new Megawati administration. It emphasizes the need for structural and governance reforms, fiscal sustainability, and poverty reduction strategies to ensure long-term economic stability and growth.

Main Points

• Economic Recovery: Indonesia's recovery slowed months before the September 11 attacks. Political instability, social tensions, and delayed reforms contributed to capital flight, investor concerns, and a lack of external finance.
• Macroeconomic Performance: The economy is expected to grow at 3.3% in 2001 and 3.5% in 2002, down from 4.8% in 2000. Despite seeming stability, the growth rate is still too low, and the country remains highly vulnerable to external risks.
• Fiscal Sustainability: Ensuring fiscal sustainability is a top priority. The 2002 budget includes significant revenue mobilization, subsidy reduction, and asset sales. Gross external financing needs are estimated at US$7 billion, with CGI pledging US$3.0-3.5 billion.
• Reforms Urgency: September 11 and global economic slowdown have intensified the need for reforms. However, progress has been limited, and donors are cautious due to a poor track record of CGI disbursements.
• Key Reforms: The report outlines priorities in structural reforms, governance, and poverty reduction. These include privatization, financial sector reforms, anti-corruption measures, and improving public financial management.

Key Recommendations

Actions Needed in 2001

• Maintain tight monetary policy to reduce inflation.
• Privatize BCA, Bank Niaga, and Semen Gresik as planned.
• Enact an effective Anti Money Laundering Law to strengthen the legal framework against corruption.
• Finalize an action plan to create the right organizational structure for public procurement.
• Adopt a rice policy that balances the needs of farmers and consumers, especially the poor, and assigns a fiscally sustainable role to BULOG.

Actions Needed in 2002

For Stability

• Meet privatization and IBRA asset recovery targets in the 2002 budget.
• Implement reforms to ensure disbursements of pledged program financing from official creditors.

For Structural Reforms

• Prepare a medium-term financial sector reform strategy in consultation with Parliament.
• Close or merge banks that fail to meet capital adequacy requirements.
• Prepare a divestment strategy for state banks.
• Consolidate and restructure the Java-based sugar industry.
• Complete restructuring of PLN (State Electricity Company).

For Good Governance

• Establish a credible, independent anti-corruption commission and fund it adequately.
• Prepare a comprehensive justice and civil service reform strategy in consultation with Parliament.
• Enact improved versions of state finances, treasury, and audit laws in cooperation with Parliament.
• Form organizations to oversee Indonesia's public procurement system.
• Align legal and regulatory frameworks with WTO and AFTA commitments.

For Empowering and Investing in the Poor

• Prepare and submit a comprehensive poverty reduction strategy to Parliament.
• Ensure more equal distribution of general allocation grants across regions.
• Allocate budgetary resources specifically for poverty alleviation programs in regions.

Key Information

• Currency: Rupiah (Rp.), with US$1 = Rp 10,600 as of November 2, 2001.
• Fiscal Year: April 1–March 31 until 2000, then calendar year from 2001 onwards.
• Key Officials:
  • Regional Vice President: Mr. Jemal-ud-din Kassum
  • Country Director: Mr. Mark Baird
  • Chief Economist: Mr. Homi Kharas
  • Sector Director: Mr. Homi Kharas
  • Task Team Leader: Mr. Vikram Nehru
• Government Commitments (Letter of Intent, August 27, 2001):
  • Maintain 2001 growth target of 3-3.5% and inflation target of 9-11%.
  • Reduce base money growth to 12% by March 2002.
  • Submit draft Sovereign Debt Securities Law to Parliament.
  • Transfer 2.1 million civil servants to regions by end-2002.
  • Finalize modalities for issuing bonds in the last quarter of 2001.
  • Complete audits of contingency funds by end-2001.
  • Refine the General Allocation Fund formula for 2002.
• Banking Reforms:
  • Launch Bank Mandiri IPO by end-2001.
  • Publish key financial data for individual banks.
  • Improve supervision and governance of non-bank financial institutions (NBFI).
  • Complete outstanding issues from BI's 1999-2000 audit.
  • Resolve BLBI credits issue by end-2001.
  • Finalize replenishment of the Government Guarantee Scheme by September.
  • Remove BII's impaired assets and replace with government bonds by mid-September.
• Corporate Restructuring:
  • Restructure a cumulative total of $14-15 billion by end-2001.
  • Refer cases with $10-11 billion in total debt to the Financial Sector Policy Committee (FSPC) by end-2001.
  • Submit an amended version of the Bankruptcy Law to Parliament by end-2001.
  • Make the Anti-Corruption Commission fully effective in the coming months.

Conclusion

The report underscores the critical need for structural and governance reforms to stabilize Indonesia's economy and ensure sustainable growth. It highlights the importance of fiscal discipline, anti-corruption measures, and targeted poverty reduction strategies. The success of these reforms is essential for the long-term development and stability of the country.