Donors ready to extend loans despite rising criticism<\/p>\n
Wahyoe Boediwardhana, The Jakarta Post, Denpasar, Bali<\/p>\n
Indonesia's traditional foreign lenders, from the Consultative
\nGroup on Indonesia (CGI), will start a two-day meeting on Tuesday
\non the resort island of Bali to determine a new loan facility for
\nthe country, as non-governmental organizations (NGOs) voice
\nstrong criticism against the creditor grouping.<\/p>\n
\"What needs to be done now is to ensure the effectiveness of
\nthe loans. Will the money help improve the welfare of the people
\nand stimulate (economic) development?\" asked Binny Buchori,
\nexecutive secretary of the International NGO forum on Indonesian
\nDevelopment (INFID), a grouping of several NGOs, at a media
\nconference here on Monday.<\/p>\n
INFID has been a strong critic of foreign donors, which have
\nprovided a huge amount in loans to the country for many years,
\nbut have largely turned a blind eye to massive misuse of the
\nloans, particularly during the past.<\/p>\n
CGI was established by the World Bank in 1992, and each year
\nthe donor grouping held a meeting to provide Indonesia with fresh
\nloans to help finance the state budget deficit.<\/p>\n
CGI coordinator the World Bank previously said that Indonesia
\nwould need US$2.4 billion to $2.8 billion in fresh loans for this
\nyear.<\/p>\n
But INFID said that the CGI loans had little benefit in
\nstimulating economic development in the country because the
\ngrouping had acted merely as a creditor rather than development
\nforum.<\/p>\n
Binny said that this had to change through the establishment
\nof an independent panel that would determine what policies should
\nbe adopted by CGI.<\/p>\n
She added that supervision and evaluation of the loan program
\nhad to be strengthened to minimize corruption or \"leakage\".<\/p>\n
INFID is a prominent NGO grouping, which, for a long time, has
\ncampaigned for Indonesia to be granted debt forgiveness on the
\ngrounds that most of the foreign loans received had been misused
\nby the previous government.<\/p>\n
The grouping is planning to stage a happening art event on
\nTuesday at the amphitheater at Nusa Dua, Bali, as a form of
\nprotest demonstration to the CGI forum.<\/p>\n
\"We'll hold a happening art event with the theme of debt
\nreduction. About 500 people will participate in it,\" said INFID
\nofficial Chris Wangkay.<\/p>\n
Earlier on Sunday, at least three youth and student
\norganizations held demonstrations in Yogyakarta, where donor
\nrepresentatives had gathered for a premeeting session.<\/p>\n
Police fired warning shots and beat the protesters.<\/p>\n
Representatives of the foreign donor countries and
\ninstitutions are expected to talk about the country's progress in
\nimplementing key reform measures.<\/p>\n
The World Bank praised Indonesia's efforts last week in
\npushing through reform programs, although it expressed
\ndissatisfaction over a tendency toward protectionism in trade
\npolicy, particularly with respect to rice.<\/p>\n
Recommended reform programs include the sale of various
\nbanking assets currently under the Indonesian Bank Restructuring
\nAgency, and commitment to privatization of state-owned
\nenterprises.<\/p>\n
Topics will not only focus on reform programs but donors will
\nalso consider how to rebuild Bali and strife-torn Aceh. The
\nformer's economy, heavily dependent on tourism and the country's
\nprincipal tourist attraction, suffered dearly after the Oct. 12
\nterrorist bombing incidents.<\/p>\n
Donor support for Aceh, which suffered from a decades-long
\nconflict between the Military and separatist guerrillas, followed
\nlast month's landmark deal for peace.<\/p>\n
The government is now seeking a lesser amount in CGI aid in a
\nbid to reduce further the country's dependency on foreign loans.<\/p>\n
With sovereign debt currently amounting to about $70 billion,
\nsuch a move is regarded as crucial to ensure sound fiscal
\nmanagement.<\/p>",
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"sponsor": "Okusi Associates",
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