___________ , 2000
The Indonesia Fund, Inc.
466 Lexington Avenue
New York, New York 10017
Ladies and Gentlemen:
You have asked us for our opinion concerning certain federal income tax
consequences to (a) The Indonesia Fund, Inc., a Maryland corporation (the
"Acquiring Fund"), (b) Jakarta Growth Fund, Inc., a Maryland corporation (the
"Target Fund"), and (c) holders (the "Target Fund Shareholders") of voting
shares of common stock of the Target Fund (the "Target Fund Shares"), when
the Target Fund merges with and into the Acquiring Fund and the Target Fund
Shares are converted to voting shares of common stock of the Acquiring Fund
("Acquiring Fund Shares") pursuant to the merger of the Target Fund with and
into the Acquiring Fund under the Maryland General Corporation Law (the
"Merger"), all pursuant to that certain Merger Agreement and Plan of
Reorganization, dated as of October 18, 2000 (the "Merger Agreement"),
between the Target Fund and the Acquiring Fund. All terms used herein which
are not specifically defined shall have the same meanings as when used in the
Merger Agreement.
Pursuant to the Merger (a) the Acquiring Fund by operation of law will
acquire all of the assets of the Target Fund and assume all of the Target
Fund's liabilities, (b) each Target Fund Share will convert to an equivalent
dollar amount (to the nearest one ten-thousandth of one cent) of full
Acquiring Fund Shares (based upon the net asset value per share of each
Fund), and (c) the Acquiring Fund will be the surviving Fund in the Merger.
The Acquiring Fund will not issue any fractional Acquiring Fund Shares to
Target Fund Shareholders but will instead purchase all fractional Acquiring
Fund Shares at their net asset value and remit the cash proceeds to Target
Fund Shareholders.
We have reviewed such documents and materials as we have considered necessary
for the purpose of rendering this opinion. In rendering this opinion, we have
assumed that such documents as yet unexecuted will, when executed, conform in
all material respects to the proposed forms of such documents that we have
examined. In addition, we have assumed the genuineness of all signatures, the
capacity of each party executing a document to so execute that document, the
authenticity of all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as certified or
photostatic copies.
___________ , 2000
Page 2
We have made inquiry as to the underlying facts which we considered to be
relevant to the conclusions set forth in this letter. The opinions expressed in
this letter are based upon certain factual statements relating to the Acquiring
Fund and the Target Fund that are set forth in the Registration Statement on
Form N-14 (the " Registration Statement") filed by the Acquiring Fund with the
Securities and Exchange Commission and representations made in letters from the
Acquiring Fund and the Target Fund addressed to us for our use in rendering this
opinion (the "Tax Representation Letters"). We have no reason to believe that
these representations and facts are not valid, but we have not attempted to
verify independently any of these representations and facts, and this opinion is
based upon the assumption that each of them is accurate.
The conclusions expressed herein are based upon the Internal Revenue Code
of 1986, as amended (the "Code"), Treasury regulations promulgated thereunder,
published rulings and procedures of the Internal Revenue Service and judicial
decisions, all as in effect on the date of this letter.
Based upon the foregoing and subject to the conditions and assumptions set forth
below, we are of the opinion that for federal income tax purposes:
(a) the Merger will constitute a reorganization within the meaning of
Section 368(a)(1)(A) of the Code and the Acquiring Fund and the Target
Fund will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Code;
(b) no gain or loss will be recognized by the Target Fund as a result of
the Merger or upon the conversion of the Target Fund Shares to
Acquiring Fund Shares;
(c) no gain or loss will be recognized by the Acquiring Fund as a result
of the Merger or upon the conversion of the Target Fund Shares to
Acquiring Fund Shares;
(d) the tax basis of the Target Fund assets in the hands of the Acquiring
Fund will be the same as the tax basis of such assets in the hands of
the Target Fund immediately prior to the consummation of the Merger;
(e) the Acquiring Fund's holding period with respect to the transferred
Target Fund assets will include the period for which such assets were
held by the Target Fund;
(f) no gain or loss will be recognized by a Target Fund Shareholder upon
the conversion of his or her Target Fund Shares to Acquiring Fund
Shares except to the extent that such Target Fund Shareholder is paid
cash in lieu of fractional Acquiring Fund Shares;
(g) immediately after the Merger, the tax basis of the Acquiring Fund
Shares received by a Target Fund Shareholder in the Merger (including
any fractional Acquiring Fund Shares deemed to be received by such
Target Fund Shareholder as set forth in (j) below) will
___________ , 2000
Page 3
be equal, in the aggregate, to the tax basis of the Target Fund Shares
held by such Target Fund Shareholder immediately prior to the Merger;
(h) immediately after the Merger, the tax basis of the full Acquiring Fund
Shares actually received by a Target Fund Shareholder in the Merger
will equal, in the aggregate, the tax basis of the Target Fund Shares
held by such Target Fund Shareholder immediately prior to the Merger,
reduced by the portion of such tax basis that is allocable to any
fractional Acquiring Fund Shares deemed to be received by such Target
Fund Shareholder and redeemed for cash as set forth in (j) below;
(i) a Target Fund Shareholder's holding period for his or her Acquiring
Fund Shares (including any fractional Acquiring Fund Shares deemed to
be received by such Target Fund Shareholder as set forth in (j) below)
will be determined by including the period for which he or she held
the Target Fund Shares converted to Acquiring Fund Shares pursuant to
the Merger, provided that such Target Fund Shares were held as capital
assets immediately prior to the Merger; and
(j) the payment of cash to a Target Fund Shareholder in lieu of fractional
Acquiring Fund Shares will be treated as though such fractional
Acquiring Fund Shares were distributed to the Target Fund Shareholder
as part of the Merger and then redeemed by the Acquiring Fund with the
result that the Target Fund Shareholder will have capital gain or loss
to the extent the cash distribution differs from such shareholder's
basis allocable to such fractional Acquiring Fund Shares as set forth
in (g) above.
The opinion set forth in (j) above assumes that (a) the converted Target Fund
Shares were held by the Target Fund Shareholder as capital assets immediately
prior to the Merger, (b) the percentage of the outstanding Acquiring Fund Shares
owned by the Target Fund Shareholder immediately after the cash distribution
(including any Acquiring Fund Shares which are deemed to be owned at such time
by such Target Fund Shareholder pursuant to Section 302(c)(1) of the Code) is
less than the percentage that would have resulted if fractional Acquiring Fund
Shares had actually been distributed to such Target Fund Shareholder in lieu of
cash, and (c) the distribution of cash in lieu of fractional Acquiring Fund
Shares is not pursuant to a formal or informal plan to proportionately reduce
the holdings of all of the owners of Acquiring Fund Shares.
___________ , 2000
Page 4
Our opinion is based upon the accuracy of the certifications, representations
and warranties and the satisfaction of the covenants and obligations contained
in the Merger Agreement, the Tax Representation Letters and in the various other
documents related thereto. Our opinion may not be relied upon if any such
certifications, representations or warranties are not accurate or if any of such
covenants or obligations are not satisfied in all material respects.
Very truly yours,