Govt seeking easier CGI lending terms
The Jakarta Post, Jakarta
The government is seeking easier lending terms at the upcoming Consultative Group on Indonesia (CGI) donors meeting, a senior government official said on Wednesday.
Koensadwanto Inpasihardjo, the secretary of the offices of the State Ministry of National Development Planning/Bappenas, was quoted by detik.com as saying that all related ministers should strive to obtain a lower commitment fee from the donors group.
He said that Indonesia had been paying a commitment fee of 1 percent on all its loans each year, although the loans were not always fully disbursed to the country. The government has to meet certain conditions to obtain those loans.
He was speaking on the sidelines of a meeting with the House of Representatives state budget committee.
The upcoming CGI meeting will be held in Yogyakarta on Oct. 28 and Oct. 29. This will be the first meeting to be held outside Jakarta.
CGI groups Indonesia's traditional donors, comprising 21 countries and 11 multinational lenders. The World Bank is one of the main creditors.
The lenders of the group pledged financial support to the country last year totaling US$3.14 billion in loans and $568 million in grants and technical aid to mostly help cover the state budget deficit.
Of that total, $1.3 billion was tied to the country's progress on policy performance, concerning poverty reduction and good governance.
However, the government often cannot fully tap the pledged loans because of its failure to meet the necessary conditions set out by particular lenders.
It is not yet clear how many new loans the government will ask for from the CGI, but according to one estimate, it would be in the range of $2 billion to $2.5 billion to help finance the 2003 state budget.
The state budget draft is being debated with the House budget committee.
The cash-strapped government has no other choice but to ask the CGI for easier terms for this year's loan commitment in order to help ease pressure on the state budget, which is heavily burdened from the huge cost of the government-sponsored bank bailout program in the late 1990s.