Donors commit $5.9 billion for Indonesia<\/p>\n
PARIS (Agencies): Donor countries and institutions on
\nWednesday pledged US$5.9 billion of assistance for Indonesia this
\nyear but stressed the need for continued economic reform, a
\nsmooth political transition and a stepped-up fight against
\ncorruption.<\/p>\n
The aid, to shore up Indonesia's 1999 budget and bolster the
\ngovernment's efforts to pull the economy out of recession, was
\nannounced by the World Bank after a meeting with around 30 donor
\ncountries and institutions at the World Bank's Paris office.<\/p>\n
"Indonesia's donors delivered a strong message today with a
\npledge of $5.9 billion in foreign assistance for Indonesia for
\nfiscal year 1999\/2000, in support of Indonesia's staying the
\ncourse of economic reform, continuing to protect the poor, and
\nstepping up the fight against corruption," the World Bank said in
\na statement.<\/p>\n
The World Bank, which hosted the meeting here, had called on
\nboth the Indonesian government and donors to "stay the course" on
\npolitical and economic reform underway.<\/p>\n
The donors also stressed the need for Indonesia to
\ncomplete "political transition", including a successful holding
\nof a referendum on self-determination for East Timor next month.<\/p>\n
"We must not become complacent," warned Sven Sandstrom, the
\nWorld Bank managing director who chaired the Paris meeting.<\/p>\n
The Indonesian government needs to "persevere and continue to
\nmake good decisions in politically difficult times," he added.<\/p>\n
The sum pledged was in line with Indonesia's earlier
\nexpectations of $5.5 billion to $6.0 billion. It compares with
\nthe $7.9 billion pledged - and the $6.2 billion actually handed
\nout - at the previous donors' meeting last year.<\/p>\n
Sandstrom said there is no link of any "flow of resources" to
\nthe planned referendum in the disputed territory of East Timor.
\nDonors are working on the assumption the referendum will go ahead
\nnext month in a free and fair manner.<\/p>\n
Indonesian Coordinating Minister of Economy and Finance
\nGinandjar Kartasasmita said the economy is on the road to
\nrecovery after its economic meltdown.<\/p>\n
But, he added, "a return to the pre-crisis days of high growth
\nand accelerated poverty reduction is still far from assured" and
\ncontinued support from the international community was vital.<\/p>\n
Ginandjar promised at the meeting that the government would
\nforge ahead unflinchingly with deep-rooted political and economic
\nreforms.<\/p>\n
Indonesia was told during the talks that it could count on
\ncontinued financial support as long as it continued to root out
\ncorruption, overhaul its banking and corporate system and work on
\ndemocracy following June's parliamentary election.<\/p>\n
Ginandjar said the next consultative group meeting will take
\nplace in January and will discuss Indonesia's external financial
\nrequirements for the 2000\/2001 fiscal year. The government will
\nlikely seek assistance of less than $5.9 billion.<\/p>\n
Japan<\/p>\n
In a related development, Japan announced in Jakarta on
\nWednesday afternoon that its delegation at the meeting in Paris
\npledged a total $1.67 billion in new aid consisting of loans and
\ngrants.<\/p>\n
Kaoru Shimazaki, economic counselor at the Japanese embassy in
\nJakarta, told reporters Japan was committed to supporting
\nIndonesia's economic recovery program but also asked the
\n(Indonesian) government to work harder to restore international
\nconfidence.<\/p>\n
"Indonesia needs to maintain its current political and
\neconomic reform measures, especially the promotion of more
\ndemocratic and good governance and implemention of projects in
\neffective and transparent manner," Shimazaki told a news
\nconference.<\/p>\n
Shimazaki said Japan's assistance consisted of 188 billion
\nJapanese yen ($1.57 billion) in loans and grants under the
\nOfficial Development Assistance (ODA) program and another 12
\nbillion yen ($100 million) in loans from Japan's Exim Bank.<\/p>\n
He said the $1.57 billion aid under the ODA program included
\n$600 million in Social Safety Net Adjustment Loan, $830 million
\nin pipeline disbursement allocated for health and nutrition
\nprogram and ongoing projects and $142 million in grant and
\ntechnical assistance.<\/p>\n
"Japan will continuously support the social safety net program
\nto help socially vulnerable people.. and to ensure that
\nassistance from various donors, including Japan, will be used for
\ntargeted people," Shimazaki said.<\/p>\n
The $100 million loan from Exim Bank was specifically
\nearmarked as the Second Policy Reform Support Loan funds to
\nsupport Indonesia in improving its governance and administrative
\nability, he said.<\/p>\n
Shimazaki said Japan intended to continue to provide as much
\nassistance as possible to the new government of Indonesia.<\/p>\n
He said, however, Japan has yet to make estimates on its new
\naid commitments to Indonesia for the 2000\/2001 fiscal year. (cst)<\/p>",
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