CGI slammed for being insensitive about RI's debts<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The meeting of the Consultative Group on Indonesia (CGI) was a
\ndisappointment because it did not address measures needed to
\ntackle the country's huge debt, International NGO Forum for
\nIndonesia Development (INFID) says.<\/p>\n
INFID, a grouping of a number of non-governmental
\norganizations (NGOs), said the new loan pledge announced on
\nThursday showed the international donors encouraged -- to some
\nextent -- the country to remain trapped in the debt circle.<\/p>\n
"The forum did not seriously discuss efforts to reduce our
\ndebts, domestic or foreign. I'm disappointed with it," INFID
\ndirector Binny Buchori said Friday.<\/p>\n
Binny said such a situation would only push Indonesia deeper
\ninto debt trouble.<\/p>\n
"Although the debt-to-gross domestic product (GDP) ratio has
\nnow declined to around 60 percent, the outstanding (debt) is
\nstill huge."<\/p>\n
At the end of the two-day CGI meeting, the country's
\ntraditional foreign donors agreed to provide US$3.4 billion in
\nnew loans and grants for the country next year. Some $2.8 billion
\nof the loans would go to finance the 2004 state budget.<\/p>\n
Some economists have said the CGI loan is crucial for the
\ncountry as it would no longer be eligible to the Paris Club debt
\nrescheduling facility once the current International Monetary
\nFund program expires at the end of this month.<\/p>\n
Excluding the latest CGI loan pledge, the country's foreign
\ndebt outstanding as of September stood at $77.1 billion, while
\ndomestic debts stood at Rp 619.7 trillion.<\/p>\n
Despite the fact the CGI was never intended as a forum for the
\ncountry to seek debt relief facility, Binny said it was the least
\nthe grouping of 30 multilateral and donor countries could do, if
\nthey were seriously concerned about Indonesia.<\/p>\n
Airing similar concerns was Vice President Hamzah Haz, who
\nasked the grouping to give Indonesia breathing space in repaying
\nits debts to the CGI, by allowing it to temporarily skip the
\npayments, so that the country could provide higher allocations
\nfor more productive spending.<\/p>\n
"The CGI should give Indonesia such a debt relief until after
\nthe economy has fully recovered," Hamzah was quoted by Antara as
\nsaying, adding the CGI could ask for the repayment after the
\neconomy manages to grow by around 7 percent.<\/p>\n
During the period of time, he added, the government could
\nallocate more on other crucial spending as the pressure on the
\nstate budget lessens.<\/p>\n
The government said it had no alternative but to look for
\nexternal funding, to help it finance the state budget, which
\nironically has been burdened heavily by the payments of existing
\ndebts, both domestic and foreign.<\/p>\n
Under the 2004 budget, for instance, Rp 131.2 trillion has
\nbeen earmarked to repay domestic and foreign debts, both the
\ninterest and principal. The figure, which accounts for more than
\none third of the budget's total expenditure, is almost double the
\namount set for development spending which stands at Rp 70.9
\ntrillion.<\/p>\n
Some analysts however, while agreeing the debt level was
\nalarming, said they were of the opinion that it remained
\nmanageable. What's more important was ensuring how to make the
\nbest use of those loans, for the good of the country.<\/p>\n
The last thing Indonesia needed was to have its debt level
\nincreased, which means more burden on the budget, without taking
\nthe benefit out of it, they said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cgi-slammed-for-being-insensitive-about-ris-debts-1447893297",
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