Govt asks World Bank to drop 1% advanced fee for loans<\/p>\n
JAKARTA (JP): The government is asking the World Bank to drop
\na one percent advanced fee it has to pay once it signs a new
\n\"project loan\" with the bank, National Development Planning Board
\n(Bappenas) deputy chairman Hidayat Syarief said.<\/p>\n
Hidayat said on Thursday that the advanced fee was burdensome
\nfor the government.<\/p>\n
\"The World Bank requires that one percent (of the loan) is
\npaid up front. It is a new scheme,\" he told reporters on the
\nsidelines of a consultation gathering between the government and
\nsome 20 non-governmental organizations (NGOs) ahead of the Feb. 1
\nto Feb. 2 Consultative Group on Indonesia (CGI) meeting here.<\/p>\n
CGI is a grouping of Indonesia's major donors led by the World
\nBank.<\/p>\n
\"This (advanced fee) is burdensome ... we have proposed this
\nto be revised, but the World Bank will make a decision at its
\nboard of directors meeting in Washington,\" Hidayat said.<\/p>\n
He said the advanced fee was on top of the usual commitment
\nfee, which ranges between 0.25 and 0.75 percent, and interest
\nrate.<\/p>\n
He said that the advanced fee was imposed last year, when the
\nWorld Bank withheld its project loans as it shifted its priority
\nto social safety net programs to help the poor in surviving the
\neconomic crisis.<\/p>\n
The World Bank, however, did not impose an advanced fee for
\nits program loans, Hidayat said.<\/p>\n
Program loans are those used to finance the government's
\nprograms, including the social safety net, while project loans
\nare used to finance infrastructure development and basic
\neducation.<\/p>\n
Hidayat added that other international lenders, like the Asian
\nDevelopment Bank, did not impose such fees on their programs or
\nproject loans.<\/p>\n
He said this issue would not likely be discussed at the CGI
\nmeeting because it was an internal matter of the World Bank.<\/p>\n
\"But if the government raises the issue of interest rates and
\ncommitment fees with the loans, the problem with the advanced fee
\ncould also be discussed at the CGI meeting,\" Hidayat said.<\/p>\n
Meanwhile, the International NGO Forum on Indonesian
\nDevelopment (INFID) called on the country's major donors grouped
\nin the CGI to provide support for the three-month-old
\nadministration of President Abdurrahman Wahid in solving the
\ncountry's economic and social problems.<\/p>\n
The group of NGOs said Abdurrahman's government was elected
\nthrough the country's first democratic election process in more
\nthan 40 years.<\/p>\n
\"This is the first time we have ever asked the donors to
\nsupport the (Indonesian) government,\" INFID executive secretary
\nBinny Buchori told a media conference following a meeting with
\nthe government and World Bank officials.<\/p>\n
She said INFID had voiced strong criticism toward the previous
\nauthoritarian regime of Soeharto.<\/p>\n
She said the meeting was unprecedented as the previous
\ngovernment never consulted the NGOs prior to signing a new loan
\nwith the country's donors.<\/p>\n
She explained that NGOs continued to put pressure on the
\ngovernment to seek a 30 percent debt relief, which was somewhat
\nequal to the amount of foreign loans corrupted by the previous
\nregime during its 32 years in power.<\/p>\n
\"But the government insists that it's impossible to ask for
\ndebt relief. The government, instead, promises to seek debt
\nrescheduling,\" Binny said.<\/p>\n
Indonesia is seeking to reschedule some US$2.1 billion of its
\nsovereign debts this year.<\/p>\n
The government has also said it expects to get $4.1 billion in
\nnew loans from its donors in CGI in the April-December budget
\nyear.<\/p>\n
Binny said the NGOs called on the foreign donors to push the
\ngovernment of President Abdurrahman to lessen the social
\npolitical role of the powerful military and to fight human rights
\nviolations in the country.<\/p>\n
\"The CGI must support the government on this matter,\" she
\nsaid. (rei)<\/p>",
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