Phil Smith, Jakarta – Indonesia is being criticised for not implementing the International Monetary Fund's new set of economic reforms quickly enough and President Suharto has come under increasing pressure from agencies and governments to get things going.

In January, the IMF returned to Indonesia to renegotiate economic reforms attached to a rescue package of some $40 billion it had orchestrated.

This became necessary because the Indonesian government had been dragging its feet on the original set of reforms set out when the rescue package was first thrashed out last October.

In the latest twist to the saga, the IMF said on Friday its board would not discuss Indonesia's reform programme before April, effectively delaying the next $3-billion disbursement.

Indonesian Finance Minister Mar'ie Muhammad had said earler on Friday that he remained optimistic the IMF would meet the March 15 deadline for a decision on the disbursement.

The January agreement set out the broad macroeconomic framework.

It said the IMF programme was designed to avoid a decline in output while containing inflation to 20 percent this year, and assumed that the external current account would move to sizeable surplus, which would help generate revenue to pay off debt. The main action points were:

The 1998/99 budget will be revised

This was done. In late-January Finance Minister Mar'ie Muhammad announced a budget closely tracking the IMF's recommendations that predicted zero growth, inflation at 20 percent and an average rupiah rate of 5,000 per dollar.

The original budget in early January forecast four percent growth, nine percent inflation and an exchange rate of 4,000.

Action to curb energy subsidies

This has yet to be enacted. The government has said it will start to eliminate subsidies on fuel and electricity gradually, starting with a sizeable initial adjustment on April 1. Kerosene and diesel fuel used mainly by poorer sections of the community will not be immediately effected. But analysts say the recent move to subsidise food imports such as sugar, wheat flour and soybeans by providing a fixed exchange rate of 5,000 rupiah to the U.S. dollar does not set a good precedent for the lifting of subsidies on fuel in less than a month.

The immediate cancellation of 12 infrastructure projects

This issue is clouded by the fact that there is not enough cash around to fund the projects at the moment anyway, so all have basically ground to a halt.

President Suharto has said he will review or postpone 15 major infrastructure projects including two coal-fired power plants estimated to cost a combined $3.5 billion. Projects delayed include toll roads, smaller power stations and a new airport in the city of Medan. Eight other projects are under review.

Analysts noted that one big project, a Jakarta public transit system, has been allowed to continue. It has been inaugurated by its principle sponsor, Siti Hardiyanti Rukmana, Suharto's daughter.

Tax benefits under the national car programme will end

In January the government stopped its funding to the Timor national car project started by Hutomo (Tommy) Mandala Putra, Suharto's youngest son. But analysts said tax exemptions for Timor were restored to allow its parent to sell stock.

But Timor is now only to receive less than half of a $690 million loan from a consortium of 16 Indonesian banks because of the economic crisis.

Bank Indonesia to be given full autonomy on monetary policy

A decree granting full autonomy to the central bank on monetary policy was put in place days after the revised IMF package was signed.

However, last month Suharto sacked central bank governor Sudradjad Djiwandono over his opposition to a fixed exchange rate system for the rupiah.

Bank director Boediono, also thought to be against the near-term implementation of a currency board, was also replaced last week. Analysts said the moves do not point to a great deal of central bank autonomy on policy, monetary or otherwise. 6) An end of government support for projects of state aircraft maker Industry Pesawat Terbang Nusantara (IPTN)

The government has withdrawn funding for IPTN, a pet project of Research and Technology Minister Jusuf Habibie. Habibie is standing unopposed for the post of vice-president.

But analysts noted that the $2-billion project to develop a new 130-seat N-2130 passenger was still going ahead and doubted whether it was possible to fully fund it from other sources. U.S. aircraft maker Boeing has said it will help with the development, but said nothing about financial backing.

Bank and corporate sector restructuring

So far 16 insolvent banks have been closed, leaving around 200 still in business. Financial analysts reckon at least another 50 to 70 should close immediately and nearly all agree that banking sector reform should be speeded up dramatically.

Structural reforms such as breaking up monopolies and cartels

Decrees scrapping state commodities regulator BULOG'S import and distribution monopolies, except for rice, and the elimination of the clove monopoly were issued in January.

But analysts said there has been much controversy about restrictive practices after cartels like Apkindo, controlled by Muhammad (Bob) Hasan, a close associate of Suharto, were scrapped. Apkindo oversaw the marketing of plywood.

Newspapers reported that plywood exporters had been pressured to use the Indonesian Shipping Association for transport, effectively creating another cartel. But since the publicity the restrictive practice has now been done away with and exporters are now free to use the shippers of their choice.

Another example of foot dragging has been the announcement that the clove monopoly controlled by Suharto's son Tommy will continue until June. Cloves are an important ingredient in Indonesia's lucrative market for traditional cigarettes.

All barriers to investment in palm oil plantations to be removed

President Suharto has issued a decree allowing foreign investment in palm oil plantations. Analysts said some Malaysian companies were getting involved in deals with local companies.

But there have been reports that the government is restricting this more open market to the relatively undeveloped East of the island of Java. Overseas investors have been more interested in plantations in the West where better infrastructure makes for lower operating costs.

Setting up of a bank deposit insurance programme to protect depositors

Finance Minsister Mar'ie Muhammad has said the government would cover all legal deposits in the 16 liquidated banks and the government has said it will guarantee commercial banks' obligations to depositors and creditors.

But analysts noted that this scheme would be difficult to enact until a decision was taken on the currency board system, which would peg the rupiah to a foreign currency, most probably the U.S. dollar.

They said it would be difficult if not impossible to continue to guarantee deposits under a currency board system because reserves would be earmarked to back the local currency in issue and for no other purpose.