CGI convenes amid rising criticism<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The Consultative Group on Indonesia (CGI) is set to start its
\ntwo-day annual meeting on Wednesday to decide on a new loan
\ncommitment to help finance Indonesia's 2004 state budget, amid
\nrising criticism of the donor grouping.<\/p>\n
As the CGI is expected to provide fresh loans at a range of
\nUS$2.3 billion to $3 billion, calls intensified on Tuesday for
\nthe country to stop foreign borrowing as it only burdens the
\ncountry further.<\/p>\n
The Indonesian Forum for Environment (Walhi) was the latest to
\njoin the group, and even demanded the CGI be dissolved.<\/p>\n
"The CGI is not giving anything. It's just a machine which
\nmaintains Indonesia's debts," Walhi deputy director Ridha Saleh
\ntold a press briefing.<\/p>\n
Ridha said that even without the new loans, the payments of
\namortization and interest of the country's $77 billion sovereign
\ndebts are eating up to 35 percent of the state budget, limiting
\nmoney for development programs and bringing suffering to the
\npeople.<\/p>\n
With close to 40 million living in poverty, Ridha claimed, the
\ncountry was currently on the brink of collapse. So, rather than
\nseeking new loans from the CGI, he continued, the government
\nshould instead optimize the use of the country's rich resources.<\/p>\n
Walhi's remarks followed similar assessments issued by noted
\neconomists, including former economic minister Rizal Ramli and
\nRevrisond Baswir of Gadjah Mada University attacking the role of
\nthe CGI in the country.<\/p>\n
Both agreed that Indonesia had always been on the weaker side
\nand was never able to stand as the equal partner of the country's
\ntraditional donors.<\/p>\n
They said that so far, the CGI had acted as a cartel in which
\nIndonesia, with its weak bargaining position, had barely a say in
\nthe negotiating process.<\/p>\n
Revrisond also called for the CGI to be dissolved. He said
\nthat, not only did the presence of CGI mean the increase of debt,
\nbut its effectiveness had been questioned in light of various
\nreports suggesting massive embezzlement in the CGI loans, thus
\nreducing its benefits.<\/p>\n
Both urged the government to seek bilateral commitments as a
\nreplacement.<\/p>\n
State Minister for National Development Planning Kwik Kian
\nGie, himself an outspoken figure, said on Tuesday that Indonesia
\nmight still need the CGI this year, but not next year.<\/p>\n
"In my opinion, we won't be needing the CGI as of next year,"
\nhe said, but, if new loans were unavoidable the country should
\nthen announce to the world that any country could come and
\nnegotiate loans directly with the government.<\/p>\n
"The government should take charge of negotiations, unlike
\nwhat we have now with the CGI, which always sees the World Bank
\nas the chairman of the meeting."<\/p>\n
Earlier, the World Bank had said that the country might obtain
\nsome US$2.7 billion from CGI to help finance next year's budget
\ndeficit from the CGI. This is the same amount pledged by CGI last
\nyear for the current budget.<\/p>\n
Proponents, however, have said that the role of the CGI was
\nstill crucial for the cash-strapped country especially as it
\nwould no longer be eligible for the Paris Club debt rescheduling
\nfacility next year with the termination of the current
\nInternational Monetary Fund program at the end of this month.<\/p>\n
Eyebox<\/p>\n
Govt yet to complete reform targets<\/p>\n
The government said on Tuesday it had yet to complete 16
\neconomic action targets scheduled for completion by the end of
\nNovember, as outlined under the White Paper document.<\/p>\n
Antara said that Coordinating Minister for the Economy
\nDorodjatun Kuntjoro-Jakti had reported to President Megawati
\nSoekarnoputri that as of November, a total of 35 action targets
\nhad been completed as scheduled, leaving 16 other targets
\nunfinished.<\/p>\n
The unfinished actions includes: the sale of majority stakes
\nin Bank Lippo and Bank Internasional Indonesia (BII); the sale of
\nassets -- property and credits -- under the Indonesian Bank
\nRestructuring Agency (IBRA); the submission of a bill on trade to
\nthe House of Representatives; the drawing up of the Anti-
\nCorruption Court blue print, and blue print of reform at the
\nCommercial Court.<\/p>\n
The White Paper is a series of economic reform targets the
\ngovernment has to achieve in 18 months starting from August this
\nyear. It comes after the government's decision not to extend the
\ncurrent IMF-sponsored reform program when it expires at the end
\nof this year.<\/p>",
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"sponsor": "Okusi Associates",
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