Ginandjar says U.S. govt not behind WB loan delay
Ginandjar says U.S. govt not behind WB loan delay
JAKARTA (JP): Coordinating Minister for Economy, Finance and
Industry Ginandjar Kartasasmita denied on Friday reports that the
U.S. government was behind the delay of a World Bank loan
disbursement for Indonesia.
He said that the delay in the World Bank's US$1.1 billion loan
disbursement until after the June 7 general election was simply
caused by Indonesia's inability to meet certain loan conditions
before the election.
Anyway, Ginandjar added, Indonesia won't need the World Bank's
money at the moment.
"There's no pressure from the U.S. (on the World Bank). I've
talked to Lawrence Summers and his staff. They said they never
asked for the delay. It's just a misperception," he told
reporters at the State Palace.
Lawrence Summers is the Treasury Secretary of the U.S.
The World Bank approved on Thursday two loans worth $1.1
billion for Indonesia, including $600 million to help strengthen
the social safety net program designed to help the poor in
surviving the economic crisis, and $500 million to support
economic reforms, the Bank said in a statement.
The money was the second set of World Bank credits for
Indonesia in less than a week after an earlier approval on
Tuesday of $400 million loans for poverty alleviation and water
resource management.
International lenders have long been worried about the fate of
money lent to Indonesia, which has been dogged by years of
corruption and crony capitalism. They are anxious not to be seen
to be backing one side in the election, and this has influenced
the latest lending decisions.
The country, however, won't have access to the loans until
after the June general election.
Indonesian officials have conceded that previous funds have
been misused by the country's ruling Golkar party. A World Bank
document released last August said up to 20 percent of loans to
Indonesia in the precrisis years could have been misused.
Press reports had earlier said that the U.S. had asked the
World Bank to delay the loan disbursement until after the
election for fear that the loans might be used for political
purposes.
Several non-governmental organizations also called on the
World Bank earlier to delay loans as the ruling Golkar Party was
suspected of using the social safety net aid to gain popularity.
Indonesia is to hold its first multiparty election after more
than 32 years under the authoritarian rule of former president
Soeharto, who stepped down in May last year and hand-picked his
protege B.J. Habibie to succeed him.
Habibie was appointed as Golkar's sole presidential candidate
last week.
Golkar, which used to win previous elections easily, is now
facing serious challenges from opposition parties particularly as
three major parties had coalesced to prevent Golkar from ruling
the country again.
Analysts said that the delay of the loans may indicate a
change of heart on the part of the U.S. government as well as the
World Bank toward their long time partner in the region, Golkar.
The World Bank gave approval on the loans after Jakarta agreed
not to touch it until after the election.
"We don't need the money immediately," said Jannes Hutagalung,
the Indonesian executive director at the World Bank in
Washington.
"But we do need the commitment now, so we can plan budget
spending over the remainder of the fiscal year," Hutagalung added
in a statement.
The World Bank said in the statement that the $1.1 billion
loans support its strategic objectives in the country of
implementing a comprehensive reform program, while protecting the
poor from the severe impact of the country's worst economic
crisis in three decades.
"This package is an essential component of the World Bank's
commitment to help the International Monetary Fund led program
promote a return to stability and growth," the Bank added.
The loans are part of the World Bank's $4.5 billion
contribution to the IMF's rescue package for Indonesia agreed to
in 1997, at the start of the economic crisis. The IMF bailout
package totals $46 billion. (prb/rei)