CGI meeting to take on corruption issues

CGI meeting to take on corruption issues

Berni K. Moestafa and Fabiola Desy Unidjaja, The Jakarta Post, Jakarta

For the first time, the Consultative Group on Indonesia (CGI)
may link its loan programs with efforts to fight corruption, as
the government hopes to secure Rp 35.4 trillion (about US$3.4
billion) from next month's CGI meeting.

Coordinating Minister for the Economy, Dorodjatun Kuntjoro-
Jakti said on Thursday the CGI meeting would discuss, for the
first time, efforts to purge corruption and strengthen the
government's system of aid disbursement.

"By the end of the (CGI) meeting we hope there will be a
pledge to provide the aid we have asked for," Dorodjatun told
reporters, following a meeting with ambassadors of CGI donor
countries.

The CGI meeting is slated for Nov. 7 and 8 in Jakarta.

The government said it would use the CGI loans to plug next
year's state budget deficit, projected at some Rp 42.1 trillion,
or 2.5 percent of gross domestic product.

But plans to discuss corruption highlight CGI's concern over
loan abuse reducing its beneficial impact.

Unconfirmed reports pointed at abuse totaling 30 percent of
the World Bank's loans of $30 billion to Indonesia.

However, the focus of the upcoming CGI meeting would be on
poverty reduction programs, Dorodjatun went on.

He said he and Coordinating Minister for Social Affairs Yusuf
Kalla would lead a team to address the poverty issue.

On the economic side, the CGI agenda was set for talks on the
resilience and recovery of the country's economy.

The government hopes to cushion the impact of a global
economic slowdown with more loans from donor countries.

Support from CGI appears to remain firm, despite worries that
the global slump would cause lenders to be less generous with
their funds.

"I received plenty of signals from many countries offering
their help to Indonesia, as next year will not be easy,"
Dorodjatun said, adding that donor countries understood the
difficulties in which Indonesia found itself.

Yet, in what could be a bad sign, the World Bank said on
Thursday it might not increase its lending from the current
annual limit of $400 million in the CGI meeting.

A World Bank official, who declined to be named, said that
unless Indonesia could meet conditions for the high-case lending
scenario of a $1 billion loan facility, the bank would maintain
its low case scenario. The conditions include serious action to
tackle corruption.

In the past, loans from the World Bank and Japan have
constituted the largest portion of CGI loans, with pledges from
each amounting to some $1 billion.