Foreign debt hampers access to food: Megawati

Berni K. Moestafa, The Jakarta Post, Jakarta

President Megawati Soekarnoputri told a United Nations summit on food and agriculture that the burden of foreign debt on poor nations restricted access to food and undermined poverty reduction efforts.

Speaking at the opening ceremony of the Food and Agriculture Organization (FAO) summit in Rome on Monday, Megawati said that efforts to achieve food security should imply an assurance of food accessibility.

Indebted poor nations cannot afford to buy food when foreign debt repayments continue to burden national budgets, according to the President.

"The absence of financial and physical access to sufficient food will only make food security part of the problem, not the solution," Megawati said in her speech at the FAO world summit, the second since 1996.

Delegates at the four-day summit are hoping to produce an action plan to halve the number of starving people by 2015. The UN estimates that around 800 million people go hungry, almost all in developing countries.

Efforts since the 1996 FAO summit to fight starvation have shown little progress despite a growth in world food supply.

Claiming to have achieved self-sufficiency in rice in 1986, Indonesia has now become one of the world's biggest rice importers.

The economic crisis in 1997 dealt a major blow to Indonesia's efforts to fight hunger, as more people fell below the poverty line.

Megawati said the crisis more than doubled the number of people living in poverty to 24.3 percent, or 50 million people, in 1998 compared to 11.3 percent, or 22.5 million, before 1996.

Agriculture experts, however, also laid the blame on the world trading regime, which they said had boosted food supplies but prevented developing countries from producing food of their own.

Trade liberalization had forced poor nations to open their markets to heavily subsidized food products from rich nations, hurting local food industries.

Indonesia's State Logistics Agency (Bulog) lost its monopoly over the importation and distribution of rice and other basic food staples in 1998 under pressure from the International Monetary Fund (IMF).

Dismantling the Bulog monopoly was a prerequisite for IMF aid, which was aimed at preventing Indonesia from going bankrupt.

But Megawati highlighted the danger of accepting aid in the first place, saying that countries became entrapped by foreign debt.

"Experience shows that many of the obstacles we increasingly encounter are not only the result of our limited national resources, but the payment of our foreign debt obligations," she said.

This fiscal year, Indonesia must set aside Rp 72.91 trillion (about US$8.3 billion) in foreign debt repayments as against the Rp 52.29 trillion it has allocated for development spending, which covers poverty reduction programs.

Development spending fuels economic growth, which generates employment so as to cut back poverty.

"Without an effective solution to the debt problem and flexibility by financing governments and institutions for debt rescheduling, I am afraid the efforts to fight poverty and to bring about food security will only become even more difficult," Megawati said.