Donors pledge $7.9b in aid to Indonesia
Donors pledge $7.9b in aid to Indonesia
PARIS (Agencies): International donors pledged yesterday
US$7.9 billion in aid to Indonesia, to be disbursed during the
1998/99 fiscal year which ends in March 1999, the World Bank
said.
The World Bank said the amount, together with an exceptional
International Monetary Fund package of more than $6 billion
announced on July 16, will cover the 1998/99 Indonesian budget
deficit, estimated at 8.5 percent of gross domestic product.
The World Bank, which chaired the Consultative Group on
Indonesia, said more than 40 donor countries and organizations
had pledged money to Indonesia.
The largest single country donor was Japan. It pledged Y187
billion plus a rice loan of 500,000 metric tons for Indonesia
this year at the meeting. Japan will also provide additional
development aid to Indonesia during the current 1998/1999 fiscal
year.
"An enduring commitment to the reforms on which the government
has embarked is required to sustain international support and
produce, in time, the recovery we all desire," World Bank
Managing Director Sven Sandstrom said at the end of a two-day
donors' meeting.
The aid announced yesterday and the $6 billion International
Monetary Fund (IMF) increased lending comes after a $41 billion
IMF-organized rescue package.
Indonesia's economy has been crippled by a severe economic
crisis triggered in July 1997 when the Thai baht plunged and
dragged down currencies in many of the region's economies. The
crisis has devastated the once-thriving economy and led to the
downfall of former president Soeharto, whose 32-year rule ended
after bloody rioting in May.
Minister of Industry and Trade Rahardi Ramelan said in Jakarta
that President B.J. Habibie was pleased by the outcome of the
meeting.
"The President said he was very happy with the results of the
CGI meeting which showed the trust of friendly countries and
international institutions in us," Rahardi said after meeting
with Habibie at the Bina Graha presidential office.
"This is proof that friendly countries and multilateral
institutions have high confidence in the prospect of reforms and
the recovery of Indonesia's economic and political stability."
Rahardi said the President was confident that an improved
economic situation could be achieved in September next year.
Coordinating Minister for Economy, Finance and Industry
Ginandjar Kartasasmita assured the foreign donors that the
government would make every effort to ensure CGI assistance would
be used effectively.
"We will make sure the funds you have made available to us
will bring direct benefit to all Indonesian people and especially
to those who have been most adversely affected by the economic
crisis," he said yesterday on the last day of the meeting.
In Jakarta, acting Japanese ambassador to Indonesia Norio
Hattori said Japan's $1.65 billion pledge was all "new money" and
would be disbursed in the current 1998/1999 fiscal year, ending
in March.
Japan's pledged assistance consists of $1.07 billion of sector
program loans, $143 million in grants, $121 million in technical
assistance and $135 million of rice loans to import 500,000 tons
of the food from Japan.
Hattori said the loans carry an interest rate of 1 percent per
annum.
He also said Japan would provide additional project loans to
the country during this fiscal year.
"At this meeting, it is not possible for Japan to pledge for
project-type loans. But Japan is prepared to consider them among
others for those projects that need urgent implementation."
Japan disbursed $150 million in sector program loans in May
and will disburse another $700 million to finance ongoing
Japanese-funded projects here.
It will bring Japan's total lending to Indonesia this fiscal
year to $2.5 billion, or about 30 percent of the $8 billion
needed by the government to finance its budget deficit.
"So, one third of the money you need to bridge the gap is
going to be borne by the Japanese government," Hattori said.
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Table: CGI loan commitments (in million dollars)
1998/1999 1997/1998
---------------------------------------------
A. BILATERAL
1. Australia 75 54.5
2. Austria 20 19.9
3. Belgium 6 -
4. Canada 25 19.0
5. Denmark 9 0.0
6. Finland - -
7. Italy 5 0.0
8. Germany 300 66.3
9. Japan 1,500 1,869.1
10. South Korea 30 72.6
11. New Zealand 3 3.4
12. Norway 10 -
13. France - -
14. Spain 25 62.5
15. Sweden - 0.0
16. Switzerland 1 5.4
17. United Kingdom 46 16.0
18. United States 250 74.0
---------------------------------------------
SUBTOTAL 2,305 2,262.7
B. MULTILATERAL
1. World Bank 2,700 1,500.0
2. ADB 2,200 1,200.0
3. United Nations 144 37.8
4. European Union - -
5. Unicef - 13.8
6. IFAD 25 25.0
7. Saudi Fund 25 20.0
8. IDB 400 100.0
9. NIB 30 40.0
10. EIB 40 100.0
11. Kuwait Fund 25 0.0
---------------------------------------------
SUBTOTAL 5,589 3,036.6
TOTAL 7,894 5,299.3