Ginandjar says U.S. govt not behind WB loan delay<\/p>\n
JAKARTA (JP): Coordinating Minister for Economy, Finance and
\nIndustry Ginandjar Kartasasmita denied on Friday reports that the
\nU.S. government was behind the delay of a World Bank loan
\ndisbursement for Indonesia.<\/p>\n
He said that the delay in the World Bank's US$1.1 billion loan
\ndisbursement until after the June 7 general election was simply
\ncaused by Indonesia's inability to meet certain loan conditions
\nbefore the election.<\/p>\n
Anyway, Ginandjar added, Indonesia won't need the World Bank's
\nmoney at the moment.<\/p>\n
\"There's no pressure from the U.S. (on the World Bank). I've
\ntalked to Lawrence Summers and his staff. They said they never
\nasked for the delay. It's just a misperception,\" he told
\nreporters at the State Palace.<\/p>\n
Lawrence Summers is the Treasury Secretary of the U.S.<\/p>\n
The World Bank approved on Thursday two loans worth $1.1
\nbillion for Indonesia, including $600 million to help strengthen
\nthe social safety net program designed to help the poor in
\nsurviving the economic crisis, and $500 million to support
\neconomic reforms, the Bank said in a statement.<\/p>\n
The money was the second set of World Bank credits for
\nIndonesia in less than a week after an earlier approval on
\nTuesday of $400 million loans for poverty alleviation and water
\nresource management.<\/p>\n
International lenders have long been worried about the fate of
\nmoney lent to Indonesia, which has been dogged by years of
\ncorruption and crony capitalism. They are anxious not to be seen
\nto be backing one side in the election, and this has influenced
\nthe latest lending decisions.<\/p>\n
The country, however, won't have access to the loans until
\nafter the June general election.<\/p>\n
Indonesian officials have conceded that previous funds have
\nbeen misused by the country's ruling Golkar party. A World Bank
\ndocument released last August said up to 20 percent of loans to
\nIndonesia in the precrisis years could have been misused.<\/p>\n
Press reports had earlier said that the U.S. had asked the
\nWorld Bank to delay the loan disbursement until after the
\nelection for fear that the loans might be used for political
\npurposes.<\/p>\n
Several non-governmental organizations also called on the
\nWorld Bank earlier to delay loans as the ruling Golkar Party was
\nsuspected of using the social safety net aid to gain popularity.<\/p>\n
Indonesia is to hold its first multiparty election after more
\nthan 32 years under the authoritarian rule of former president
\nSoeharto, who stepped down in May last year and hand-picked his
\nprotege B.J. Habibie to succeed him.<\/p>\n
Habibie was appointed as Golkar's sole presidential candidate
\nlast week.<\/p>\n
Golkar, which used to win previous elections easily, is now
\nfacing serious challenges from opposition parties particularly as
\nthree major parties had coalesced to prevent Golkar from ruling
\nthe country again.<\/p>\n
Analysts said that the delay of the loans may indicate a
\nchange of heart on the part of the U.S. government as well as the
\nWorld Bank toward their long time partner in the region, Golkar.<\/p>\n
The World Bank gave approval on the loans after Jakarta agreed
\nnot to touch it until after the election.<\/p>\n
\"We don't need the money immediately,\" said Jannes Hutagalung,
\nthe Indonesian executive director at the World Bank in
\nWashington.<\/p>\n
\"But we do need the commitment now, so we can plan budget
\nspending over the remainder of the fiscal year,\" Hutagalung added
\nin a statement.<\/p>\n
The World Bank said in the statement that the $1.1 billion
\nloans support its strategic objectives in the country of
\nimplementing a comprehensive reform program, while protecting the
\npoor from the severe impact of the country's worst economic
\ncrisis in three decades.<\/p>\n
\"This package is an essential component of the World Bank's
\ncommitment to help the International Monetary Fund led program
\npromote a return to stability and growth,\" the Bank added.<\/p>\n
The loans are part of the World Bank's $4.5 billion
\ncontribution to the IMF's rescue package for Indonesia agreed to
\nin 1997, at the start of the economic crisis. The IMF bailout
\npackage totals $46 billion. (prb\/rei)<\/p>",
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