Indonesia’s move to repay its International Monetary Fund (IMF) debt early marks the final chapter of the financial crisis that tortured Asia almost a decade ago, just as investors are again growing wary of emerging markets.

Indonesia is the last of the Asian countries hit by the 1997/98 crisis to pay off its debts, which will free it from the IMF and the policy prescriptions it has grudgingly accepted.

The plan to repay as early as this year $7.8 billion of loans due in 2010 will save $200 million in net interest and give the government greater autonomy.

“Discussions will no longer be needed, so that the government can 100 percent pursue its policies. It can be said that we no longer need a supervisor,” Indonesian Central Bank Deputy Governor Hartadi Sarwono told parliament.

While that would give Indonesia room to go slow on sensitive issues such as privatization of state firms, analysts see it as unlikely to significantly alter the country’ economic outlook due to current account surpluses, a falling debt-to-GDP ratio and a low budget deficit.

Indeed, a sell-off in emerging markets that began last month and the need to build investor confidence means Jakarta will likely pursue economic policies broadly similar to those prescribed by the IMF, at least for a while.

Indonesia depends less on global trade than neighbors Malaysia and Singapore, making domestic factors critical in assessing its outlook.

“I always look at Indonesia not so much from the world but where they are slipping on liquidity management, where are they slipping on fiscal,” said Greg Fager, director for Asia at the Washington-based Institute of International Finance, an umbrella group for 340 of the world’s private sector banks.

“For example, a year ago we were concerned there was too much liquidity in the market and we were watching the oil price escalating. I don’t see those kinds of policy imbalances right now,” he said.

Last week, central bank governor Burhanuddin Abdullah said half the loans would be repaid within weeks and the remainder could be settled later this year due to growing foreign exchange reserves.

Indonesia’s foreign exchange reserves rose to a record $44.17 billion at the end of May, up almost 30 percent this year.

Still, some economists believe that the current market turbulence may see Indonesia hold off on paying back the IMF.

The end of the IMF loans comes as Asia seeks a greater say in the affairs of the Washington-based lender, to reflect its increasing global weight.

Increased Asian representation could give the IMF more credibility in a region with reserves so vast it does not necessarily need the IMF’s help if there were another crisis.

After the Asian crisis, a regional network of bilateral swap arrangements was established for countries to borrow funds from each other to defend currencies at times of crisis.

“It reflects a new era, with growing confidence on a stronger regional cooperation to help countries if there were a crisis again,” the central bank’s Sarwono told Reuters.

He also said there was a possibility of the IMF raising its charges on the countries still under its loan program — Turkey and Indonesia — as early paybacks by Brazil and Argentina had weakened its finances and prompted it to take austerity measures.

Stephen Schwartz, the IMF’s senior representative in Indonesia, has told Reuters the fund welcomed the early repayment plan as it reflected an improved balance of payments and strengthened economic fundamentals.

But privatization, which had been a key plank of the IMF program, has largely stalled under the current administration. The vice president has even called for shares in key firms to be bought back.

“(The IMF) in the past asked for privatization for transparency. But the proceeds had been used to cover budget deficit. That’s wrong because budget deficit is a political choice, whether it zero or whatever number,” Said Didu, secretary to the minister of state enterprises, said.

Still, analysts felt that Indonesia, while better able to pay attention to domestic political sensitivities once the loans are paid off, would not risk antagonizing investors.

Last year, fears that costly oil subsidies would cause a budget crunch sparked a plunge in the rupiah currency and worries of a broader economic crisis. The government responded by slashing fuel subsidies and the central bank hiked rates sharply, stemming the capital outflow and calming markets.

“Indonesia and many regional neighbors have made progress in recent years including a swing to current account surplus, leaving them less vulnerable than during the mid-1990s,” said Singapore-based director of Asian Economic Forecasting David Cohen of Action Economics.

“However, that is not to say that a renewed panic by investors would be painless.”