Faster reforms, please

International donors unanimously reaffirmed strong support for Indonesia at this extremely difficult time and indicated their intention to make additional loan and grant commitments provided reforms are vigorously pursued.

This was the spirit of the informal meeting of the Consultative Group on Indonesia (CGI) on Friday that assessed the country's economic problems and outlook in the aftermath of the horrific Oct. 12 bomb blast in Bali. The interim meeting prepared the agenda for CGI's 12th annual conference, which was rescheduled from late October to Jan. 21 and Jan. 22.

The World Bank-coordinated donors indicated their willingness to ensure adequate financial support and to be flexible enough with regards to the amount of their aid and the terms of their loan commitments to meet the need of the state budget next year.

That means that the donors will be willing to put up larger amounts of soft-term loans to finance the bigger deficit spending the government plans next year to provide stimulus to the economy. Indonesia may also get more commitments in the forms of grants and quickly disbursing loans, instead of project aid that requires counterpart funding from the government.

But however flexible the donors are about the terms of their loans and however strong is their support of Indonesia, there is one crucial requirement that appears to be nonnegotiable: strong security measures against terrorism and accelerated implementation of structural reforms in all sectors.

The World Bank and the Asian Development Bank, which together usually account for more than 40 percent of CGI's total aid commitments, emphasized at the meeting that this is now the time for the government to show its leadership in speeding up reforms.

The International Monetary Fund, which is providing an extended facility to help Indonesia manage its economic crisis, urged the government to move decisively to strengthen the execution of structural reforms to bolster market confidence and contain the adverse impact of the Bali bomb attack.

Even Japan, the single largest donor of the 30-member CGI which usually opts for sugar-coated criticism, was more straightforward with bold advice, pointing out that at the very moment accelerated reforms are critically needed to restore the foundations of growth and development.

This strong advice should not be seen as an intervention into Indonesia's internal affairs. Neither does it mean that the government should push through reforms simply to obtain foreign aid.

The blunt fact is that the donors would simply be wasting their money if, for example, corruption continued to wreck the effectiveness of government investment expenditures. Simply put, Indonesia would never get out of its current crisis without pushing through all the reforms in banking, corporate, public- sector governance and judicial sectors.

Moreover, how could we be justified in asking for help from taxpayers in other countries if we ourselves did not fully take our share of the burden, nor were determined to go all out to take on painful reforms to eliminate the woes that caused our crisis in the first place?

The donors don't appear to be asking for immediate completion of all structural reforms, which would be impossible in view of the complex challenges the nation is facing in its transition from authoritarian rule to democracy and from centralized government to regional autonomy.

They realize that many of the reform measures would take considerable time to accomplish. They nonetheless want to see the government lay out a clear road map for reforms and maintain policy coherence and remain on the right path of the reform drive.

All this makes it vital for President Megawati Soekarnoputri's administration to show strong leadership, give solid responses to the problems and communicate these responses to the people.

Megawati should begin to realize that, different from the era of Soeharto's authoritarian rule, governing Indonesia now is about building coalitions at the House of Representatives. But she will not be able to build coalitions if she cannot maintain high discipline within her own party (the Indonesia Democratic Party of Struggle, PDI Perjuangan), the largest faction at the House.

Only with highly disciplined parties will Megawati and her Vice President Hamzah Haz, leader of the United Development Party (PPP), which is the third largest faction at the House, be able to reach the necessary compromises with other factions in order to build the coalitions needed to obtain national consensus for reform measures and to advance reform legislation through the House.