Soeharto welcomes US$5.3 billion CGI aid pledge<\/p>\n
JAKARTA (JP): President Soeharto yesterday welcomed the US$5.3
\nbillion aid pledged for this year by donor governments and
\ninternational lending agencies under the Consultative Group on
\nIndonesia (CGI).<\/p>\n
Minister of Finance Mar'ie Muhammad, quoting Soeharto, said
\nIndonesia was grateful for the international community's
\ncontinued trust.<\/p>\n
"This is evident from the aid pledged to us, the amount of
\nwhich reaches almost $5.3 billion," he said after meeting the
\nPresident at the Merdeka Palace.<\/p>\n
He was accompanied by State Secretary Moerdiono and Deputy
\nChairman of the National Development Planning Board, Rahardi
\nRamelan.<\/p>\n
Mar'ie said that the aid -- slightly higher than the $5.26
\nbillion pledged last year -- would be used in the "most
\nresponsible way".<\/p>\n
"This means we will use this aid ... to improve people's
\nwelfare, including through the development of economic
\ninfrastructure facilities, particularly in regions outside Java,"
\nhe said.<\/p>\n
He said members of the CGI had a lot of confidence in
\nIndonesia's management of its economy.<\/p>\n
The pledges were announced Thursday at the conclusion of a
\ntwo-day CGI meeting in Tokyo.<\/p>\n
The World Bank pledged $1.5 billion and the Asian Development
\nBank, $1.2 billion. The two are the largest financial
\ninstitutions grouped in the CGI.<\/p>\n
The World Bank chairs the CGI whose members include 18 donor
\nnations and 11 financial institutions.<\/p>\n
Japan was the largest donor nation with 213.74 billion yen
\n($1.88 billion).<\/p>\n
Mar'ie said Indonesia would continue to speed up the repayment
\nof high-interest loans.<\/p>\n
Indonesia has expedited the repayment of $3.5 billion in high-
\ninterest foreign debts and is in the process of doing so to
\nanother $1 billion it owes the United States.<\/p>\n
"This means we have so far accelerated the repayment of $4.5
\nbillion of our foreign loans," he said.<\/p>\n
Mar'ie said CGI members appreciated these moves, which, he
\nsaid, were part of the government's prudent debt management
\nprogram. Such moves also helped reduce the government's debt to
\nservice ratio, he said.<\/p>\n
Indonesia's debt to service ratio -- the ratio of foreign debt
\nservicing to export revenue -- stood at 34.2 percent in fiscal
\n1996\/1997.<\/p>\n
The government wants to reduce the country's debt service
\nratio to a healthy 25 percent by 1999.<\/p>\n
Rahardi said most of the aid would be used to develop
\ninfrastructure facilities in eastern Indonesia, remote areas and
\nparts of Java.<\/p>\n
Mar'ie said the President had asked ministers yesterday to
\nrefrain from unfair bidding practices when running development
\nprojects.<\/p>\n
"(The President) reminded them not to 'ration' the number of
\nprojects that are openly tendered," he said.<\/p>\n
On the currency rate, Mar'ie said he was confident the rupiah
\nwould continue to receive little pressure from speculative
\nattacks.<\/p>\n
Thailand and the Philippines have had to devalue their curren
\ncies following speculative attacks. Shortly after the devaluation
\nof the Philippines' peso, Bank Indonesia widened the dollar-
\nrupiah band, in which the rupiah can float before the central
\nbank intervened, to 12 percent from 8 percent.<\/p>\n
"Attacks on the rupiah are small compared to those on the
\n(Thai) baht and the peso because we have long applied a floating
\nand controlled system in managing foreign currencies, which means
\nwe allow the market to take over," Mar'ie said.<\/p>\n
By increasing the intervention spread the rupiah would remain
\nflexible, he said.<\/p>\n
In Tokyo, Bank Indonesia Governor Soedradjad Djiwandono was
\nquoted by Reuters as saying that he was not targeting an exact
\ndepreciation level for the rupiah.<\/p>\n
"It is getting more complicated, we cannot use a simple,
\nlinear way of thinking," he said when asked whether the central
\nbank would maintain its 5 percent annual depreciation level.<\/p>\n
"We are not working like mathematicians to make it exact," he
\nsaid.<\/p>\n
"It is difficult for me to answer with a convincing word ...
\nbecause the issue is complex, not just black and white."<\/p>\n
Soedradjad said central banks in developing countries could
\nnot just concentrate on one issue such as inflation like their
\ndeveloped country counterparts.<\/p>\n
"I believe that the financial and monetary sectors have to
\nsupport and facilitate the real sectors," he said. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/soeharto-welcomes-us53-billion-cgi-aid-pledge-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}