Donors pledge $5.3b in fresh aid to RI
JAKARTA (JP): Donor governments and international lending agencies led by Japan and the World Bank pledged in Tokyo yesterday to give Indonesia $5.3 billion in aid this year, Antara reported.
The pledges were made at the conclusion of a two-day meeting of the Consultative Group on Indonesia (CGI). The amount is higher than the $5.26 billion pledged by Indonesia's creditor group at its meeting in Paris last year.
The decision brought relief to the Indonesian delegation led by Coordinating Minister for Finance and Economy Saleh Afiff.
There had been concerns that Indonesia's row with Japan, the United States and the European Union over its national car policy at the World Trade Organization (WTO) in Geneva would affect the flow of aid into Indonesia. In addition, Japan, facing budgetary pressures, has announced it will slash its Official Development Assistance (ODA) 10 percent.
Antara said the national car controversy was not raised but some donor representatives raised concerns about human rights, labor and corruption problems in Indonesia.
Afiff explained that had it not been for the World Bank, which raised its loan commitments by $300 million to $1.5 billion, the total amount pledged would have declined.
World Bank representative in Indonesia, Dennis de Tray, was quoted by Antara as saying in Tokyo the bank's increasing loan commitments were to support Indonesia's economic growth, poverty alleviation drive and human resources development program.
Japan remains the largest single creditor with commitment of 213.74 billion yen ($1.88 billion). While its ODA was 3.5 percent higher compared to last year's, Japan terminated its two-step loans in its aid package. The net total therefore was lower than the $1.92 billion Japan pledged last year.
Many other donor governments are also cutting their aid.
The United States cut its aid to $74 million from $84.7 million, Germany to $66 million from $208 million, United Kingdom to $16 million from $20 million and Canada to $19 million from $20.5 million.
Denmark, Italy and Sweden did not pledge anything while Belgium, Finland, Norway and France were still calculating the amount of their aid.
Indonesian officials said the United States and Japan were cutting their aid because of budget problems while most European countries were shifting their aid to African countries.
Another traditionally large creditor, the Asian Development Bank, pledged $1.2 billion this year, the same as last year. South Korea increased its commitment to $72.6 million from $38.7 million and Australia to $54.5 million from $50.5 million. Spain maintained its commitment at $62.5 million.
The World Bank is the chair of the CGI whose members include 18 donor nations and 11 financial institutions. The meeting agreed to hold next year's meeting in Paris, Antara said.
Japan's aid package for 1997/1998 consists of 195.25 billion yen in loans through the Overseas Economic Cooperation Fund (OECF) and 18.5 billion yen in grants and technical assistance.
The Japanese Embassy here said the higher loans to Indonesia represented its continuing support for Indonesia's economic and social development, although it was cutting its total ODA budget.
"Japan has thus demonstrated once again its fundamental policy to provide Indonesia with its utmost support so that it can implement its development programs," the embassy said.
The 195.25 billion yen loans, carrying an interest rate of 2.7 percent a year, will go towards improving transportation infrastructure and water resources, preventing natural disasters, maintaining living environment, encouraging human resources development and alleviating poverty.
The embassy said the 18.5 billion in grant and technical cooperation to Indonesia this year would be directed mainly at poverty alleviation, health and human resources development. (rid)
Table: CGI loan commitments (in million dollars)
1997/1998 1996/1997 ========================================== A. BILATERAL
1 Australia 54.5 50.5
2 Austria 19.9 23.5
3 Belgium * 16.1
4 Canada 19.0 20.5
5 Denmark 0.0 3.3
6 Finland * 1.1
7 Italy 0.0 6.5
8 Germany 66.3 208.3
9 Japan 1,869.1 1,916.7
10 South Korea 72.6 38.7
11 New Zealand 3.4 3.4
12 Norway * ---
13 France * 100.0
14 Spain 62.5 62.5
15 Sweden 0.0 ---
16 Switzerland 5.4 8.0
17 United Kingdom 16.0 20.0
18 United States 74.0 84.7
-----------------------------------
SUBTOTAL 2,262.7 2,563.8
B. MULTILATERAL
1 World Bank 1,500.0 1,200.0
2 ADB 1,200.0 1,200.0
3 United Nations 37.8 36.6
4 European Union * ---
5 Unicef 13.8 15.1
6 IFAD 25.0 20.0
7 Saudi Fund 20.0 ---
8 IDB 100.0 100.0
9 NIB 40.0 50.0
10 EIB 100.0 50.0
11 Kuwait Fund 0.0 ---
-----------------------------------
SUBTOTAL 3,036.6 2,671.7
===================================
TOTAL 5,299.3 5,260.5
* still being calculated source: Antara
Editorial -- Page 4