Donors meeting determined to keep Indonesia afloat<\/p>\n
JAKARTA (JP): The Consultative Group on Indonesia (CGI) will
\nstart its meeting here on Tuesday amid the country's need for
\nloans and its pressing security and political problems.<\/p>\n
Vice President Megawati Soekarnoputri is scheduled to open the
\ntwo-day gathering of the CGI in Jakarta, the first time the
\ncountry will host the major donors.<\/p>\n
President Abdurrahman Wahid handed over the leadership of the
\nfragile nation temporarily to Megawati as he embarked on a two-
\nweek overseas trip starting on Friday.<\/p>\n
Donors are expected to reach an agreement to provide the
\ncountry with between US$4.2 billion and $4.7 billion in new loans
\nto help finance the huge deficit in the April-December 2000 state
\nbudget.<\/p>\n
The deficit is estimated at 5 percent of the gross domestic
\nproduct (GDP).<\/p>\n
Other financing sources of the deficit are from the sale of
\nbanking assets controlled by the Indonesian Bank Restructuring
\nAgency (IBRA) and privatization of state-owned companies.<\/p>\n
Non-governmental organizations (NGOs) grouped under the
\nInternational NGO Forum on Indonesian Development (INFID) urged
\nthe donors last week to support the administration of President
\nAbdurrahman in resolving the country's economic crisis and in
\ntransforming the country into a new democratic society.<\/p>\n
The NGOs met with the government, the World Bank and the lead
\ncoordinator of CGI last week in a pre-CGI consultation gathering.<\/p>\n
The previous government did not organize a meeting prior to
\nthe signing of new loans with the CGI.<\/p>\n
It was also the first time the NGOs called on donors to
\nsupport the Indonesian government. The NGOs have often criticized
\nthe previous government, particularly for corrupting the
\ncountry's overseas loans.<\/p>\n
The Netherlands will resume its active role in the CGI
\nmeeting. Former president Soeharto discontinued financial
\nassistance from the country's former colonial ruler in 1992 after
\naccusing then Dutch development cooperation minister Jan Pronk of
\nmeddling in Indonesia's domestic affairs.<\/p>\n
Portugal will also participate for the first time in the CGI
\nmeeting but only as an observer. Portugal is the former colonial
\nruler of East Timor, a former province of Indonesia which decided
\non independence last year.<\/p>\n
In addition to economic reform and democratization issues,
\nother top items on the agenda in the CGI meeting include pressure
\nfrom the donors for Indonesia to immediately resolve its weak
\nforest management system.<\/p>\n
The World Bank said forest mismanagement had caused the
\ncountry to suffer about $2 billion in losses annually.<\/p>\n
But local economists and NGOs have called on the government to
\nput corruption as the top focus of the CGI meeting.<\/p>\n
They argued that the corruption issue was more pressing than
\nforestry issues because the cost of massive leakages in the
\ngovernment's foreign loans in the past should not only be borne
\nby Indonesia alone but also by the donors, particularly the World
\nBank.<\/p>\n
Gadjah Mada University economist A. Tony Prasetiantono said
\nthat the bank should also be held responsible because it
\ncontinued to convince the world to lend money to the previous
\ngovernment despite the persisting corruption.<\/p>\n
\"It's rather ridiculous if the new loan is more linked to
\nforestry than the corruption issue,\" Tony said.<\/p>\n
NGOs have called on the World Bank to provide the country with
\ndebt relief or debt reduction as part of its responsibility for
\nthe past mistakes. (rei)<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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