Indonesia will seek to mend ties with IMF visit

By CNN's Alex Frew McMillan in Hong Kong

JAKARTA, Indonesia -- Indonesia is seeking to repair its relations with the International Monetary Fund (IMF) when the group visits next week.

A high-level mission led by Anoop Singh, deputy director for the Asia-Pacific region, will arrive Monday, the IMF's Indonesia office told CNN.

The IMF suspended a $400 million loan last December, saying the government had not met its economic reform targets. That's part of a vital $5 billion package.

The Indonesian government had expected an IMF visit by the end of August to try and get the package back on track.

Wahid's ouster disrupts plans

A similar team was in Jakarta in early July for 10 days of talks.

At the time, Abdurrahman Wahid's administration said it expected to work out an IMF deal soon.

But the package was delayed when Indonesian lawmakers ousted Wahid, bloodlessly, from power.

The IMF's senior Indonesia representative says initial dealings with the new administration have been good.

"Over the past few days, I have had a series of constructive meetings with the coordinating minister, other ministers in the economic team, and the governor of Bank Indonesia," David Nellor said.

The IMF froze its loans because reforms were apparently going nowhere under Wahid in Indonesia, the world's fourth-most populous country.

In the months leading up to Wahid's ouster, politics consumed all attention.

Interest on the upswing

Overseas businesses, in particular, have been disheartened to see no progress made on encouraging investment into the country.

Newly installed President Megawati Sukarnoputri has gotten favorable early reviews for her cabinet choices. Analysts say she may push ahead with reforms.

On Monday, she tapped well-regarded former Citibank employee Laksamana Sukardi to oversee the Indonesian Bank Restructuring Agency, a key body to push changes.

Sukardi is expected to move ahead with reforms and fight graft, making unpopular moves if necessary.

The early signals have re-ignited interest in Indonesia, which had seen its relationships with the world's most important lending bodies collapse.

The World Bank's investment arm, the International Finance Corp., also stopped making new loans in Indonesia, in March.

The IFC, which supports businesses looking to invest in developing countries, tells CNN it now wants to move forward with $250 million that it had in the pipeline.

Analysts say Megawati's cabinet is well-known outside Indonesia and in international business circles.

The IMF has drafted a schedule of reforms that it wants to see in Indonesia. It says it will review progress in September.

Some observers suggested the IMF wanted to wait to see what happened to Wahid's presidency before finalizing the schedule, to avoid having to renegotiate any deals with a new president.

Indonesia's dog-eared currency, the rupiah, has rallied extremely sharply since Megawati took office. It was trading at 8,415 to the U.S. dollar on Tuesday, near an 11-month high.

Officials say they are not worried about the rise of the currency, which breached 10,000 in the turmoil around Wahid's exit.