Indonesia asks Japan not to reduce its foreign aid
Indonesia asks Japan not to reduce its foreign aid
TOKYO (AFP): Indonesia's Coordinating Minister for Economy and Development Supervision Saleh Afiff asked Japan yesterday not to reduce foreign aid, expressing concern about an expected cut in overall Japanese aid by 10 percent next year, foreign ministry officials said.
"We would like Japan to continue foreign aid at the current level, as there is a huge demand for domestic development in Indonesia," Afiff was quoted as saying in a meeting with Foreign Minister Yukihiko Ikeda.
Ikeda said: "Considering the scheduled 10 percent cut, it would be difficult to get the current level of official development assistance (ODA) budget in the next year."
Ikeda added, however, that Japan was considering making more use of private funds for development assistance to Indonesia to compensate for the planned cut in ODA.
Japanese Prime Minister Ryutaro Hashimoto plans to reduce ODA by as much as 10 percent, or 110 billion yen (US$965 million), for the year starting April 1998, marking the first decline in two decades.
The Japanese government has allocated 1.17 trillion yen ($10 billion) to its ODA budget for the year ending in March 1998, up 2.1 percent from a year earlier.
It provided 892.42 million dollars worth of ODA to Indonesia in 1995, according to the foreign ministry. RI expects US$5.3b in new loans from CGI
Afiff said in Jakarta last week that Indonesia expected $5.3 billion in new foreign loans this year from the Consultative Group on Indonesia (CGI) despite a possible reduction in aid from Japan.
He said the CGI, which would hold its annual meeting in Tokyo early next week, to give at least the same amount as last year.
The CGI committed $5.26 billion in new loans and grants last year, compared to $5.35 billion the year before.
Afiff said that Japan -- CGI's largest creditor -- was facing financial problems which had forced it reduce its foreign aid.
Japan's foreign aid to Indonesia through the CGI was $1.91 billion last year or 36 percent of the total, as compared to $2.14 billion or 40 percent of the total in the previous year.
Other big donors under the CGI are the World Bank ($1.2 billion or 23 percent) and Asian Development Bank ($1.2 billion or 23 percent).
Afiff also referred to the dollar's appreciation against the Japanese yen. Last year the dollar stood at 88 yen, but it now hovers at 114 yen.
"If Japan's loan this year is maintained at last year's amount of 206.5 billion yen, it will then reach only $1.81 billion in dollar terms, down by $106 million from last year," Afiff said.
The CGI groups the U.S., Australia, Austria, Belgium, Denmark, Finland, Britain, Italy, Japan, Germany, Canada, South Korea, Norway, France, New Zealand, Spain, Switzerland and Sweden.
Also included in the CGI are the World Bank, Asian Development Bank and International Monetary Fund.