CGI likely to meet RI aid demand<\/p>\n
JAKARTA (JP): Donors are most likely to meet Indonesia's
\nrequests for aid in spite of their concern over the recent ban of
\nthree magazines and increasing labor strikes in the country,
\nCoordinating Minister for Economy and Finance Saleh Afiff said.<\/p>\n
\"There is no indication that donors will link their concern
\nover the press bans and increasing labor strikes with their aid
\nfor Indonesia,\" he told reporters last night after the first
\nsession of a two-day meeting of the World Bank-led Consultative
\nGroup on Indonesia (CGI) in Paris.<\/p>\n
Yesterday's session, led by World Bank Vice President for East
\nAsia and the Pacific Gautam Kaji, was attended by 19 country
\nmembers and 13 institutional members.<\/p>\n
A Kompas correspondent reported from Paris that during the
\nopening of the closed meeting in the World Bank office, dozens of
\nmembers of French non-governmental organizations were
\ndemonstrating outside to demand the donors to pay attention to
\nthe human rights situation in Indonesia.<\/p>\n
Afiff, who led the Indonesian team for this year's CGI
\nmeeting, said that he had explained the details of the cases of
\nlabor strikes and media bans to representatives of the CGI
\nmembers. \"The cases will not affect CGI's commitments for some
\nUS$5 billion in aid for Indonesia as recommended by the World
\nBank,\" he said.<\/p>\n
Last year, CGI pledged to provide total aid of $5.11 billion
\nfor Indonesian development programs.<\/p>\n
An informed source told Kompas in Paris yesterday that CGI
\nwill likely pledge over $5 billion in aid for Indonesia. A
\nJapanese representative said Japan's commitment will likely
\nincrease to some $1.7 billion from $1.44 billion last year due to
\nthe appreciation of the yen.<\/p>\n
The World Bank, in its 240-page report entitled Indonesia:
\nStability, Growth and Equity in Repelita VI, urged that the
\nIndonesian government maintain its prudent debt management,
\nintensify deregulatory reforms, continue poverty alleviation
\nprograms, increase infrastructure development and promote
\nenvironmental protection.<\/p>\n
Afiff, in his opening speech, said Indonesia is committed to
\nimproving its macro-economic policies to maintain economic
\nstability through the control of inflation and adoption of a
\nbalanced budget.<\/p>\n
\"We will invite all parties, including private business
\nsectors, to get involved in the restructuring of the economy,\" he
\nsaid.<\/p>\n
Debt<\/p>\n
Earlier, Afiff told Indonesian reporters covering the CGI
\nmeeting in Paris on Wednesday evening that the government will
\ncontinue limiting its foreign debt.<\/p>\n
The government has also asked the private sector to restrain
\nthemselves from making new offshore commercial loans.<\/p>\n
Indonesia's total foreign debt has reached $90 billion, of
\nwhich $36 billion is owed by the private sector. Out of the total
\ndebt, 20 percent has short maturity.<\/p>\n
\"I have repeatedly warned borrowers in the country to restrain
\nthemselves from taking new loans to help the nation's total debts
\nstay below the psychological barrier of $100 billion,\" he said.<\/p>\n
The ignorance of the psychological barrier will negatively
\nimpact not only Indonesia's current accounts but also borrowers
\ncredibility in the country's financial management, he said.<\/p>\n
\"Another possible impact is that donors may be forced increase
\ntheir lending rates,\" he cautioned.<\/p>\n
He noted that Indonesia's debt service ratio (DSR) now stands
\nat 32 percent. \"But, the government's DSR is only 22 percent. It
\nis relatively safe for us,\" he added.<\/p>\n
To keep the borrowing situation under control, the government
\nhas set a ceiling of $6.5 billion in new offshore commercial
\nloans for this fiscal year.<\/p>\n
Afiff conceded that the government does not intend to ban the
\nprivate business sector from making new foreign loans \"but they
\nshould be fully aware of the ceiling, considering that any
\nmismanagement in debts will consequently put their credibility at
\nstake.\"<\/p>\n
The World Bank urged in its report that the government improve
\nits supervision on foreign loans, especially commercial ones.
\n\"The effectiveness of Indonesia's foreign loan supervisory board
\n(PKLN) will improve efficiency in foreign debt management,\" the
\nWorld Bank said.<\/p>\n
Responding to the World Bank's statement on the relatively
\nhigh stance of Indonesia's incremental capital output ratio
\n(ICOR), Afiff said that it was because Indonesia's long-term
\ndevelopment programs are emphasized on the development of
\ninfrastructures which do not immediately show profits.<\/p>\n
But Afiff acknowledged that the high level of ICOR is partly
\ndue to inefficiency and misallocation of public investments.
\n(fhp)<\/p>\n
Editorial -- Page 4<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/cgi-likely-to-meet-ri-aid-demand-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }