Indonesia may get lower loan support from CGI: Ginandjar

Indonesia may get lower loan support from CGI: Ginandjar

JAKARTA (JP): Indonesia may not be able to get a large enough
loan commitment this year from the Consultative Group on
Indonesia (CGI) to finance the state budget for the next fiscal
year, Coordinating Minister for Economy, Finance and Industry
Ginandjar Kartasasmita said here on Friday.

Ginandjar said the donors grouped in the CGI, particularly the
World Bank and the Asian Development Bank, had nearly reached the
limit of allowable exposure to any one country.

"It will be tough to get the same amount as last year. But it
doesn't mean it is impossible... Economic diplomacy is very
important," Ginandjar said, adding that the country still needed
massive amounts of international financial aid to repair its
economy.

Indonesia received some US$7.9 billion in loan commitments
from the CGI in July 1998.

Ginandjar said the July 26 to July 27 meeting with the CGI
would go forward as planned despite calls to delay the meeting
until a new administration was formed in November.

"All CGI members have agreed to proceed as planned," he said.

He said the upcoming CGI meeting would only result in loan
commitments from major multilateral and bilateral donors, while
the details of the loans would have to be worked out by the next
administration.

Indonesia held a landmark general election on June 7, and a
presidential election is scheduled for November during the
General Session of the newly formed People's Consultative
Assembly.

Provisional election results show the Indonesian Democratic
Party of Struggle (PDI Perjuangan) led by popular opposition
figure Megawati Soekarnoputri with a commanding lead.

Ginandjar said that prior to making any loan commitments, CGI
members would first discuss specific topics with the government.

"In the past, the topics included human rights and East
Timor," he said, referring to the former Portuguese colony which
was annexed by Indonesia in 1976.

"But I think East Timor will no longer be an issue," he said.

The United Nations is organizing a direct ballot on August 8
to allow the East Timorese to decide whether the province will
remain a part of Indonesia with wide-ranging autonomy or separate
from Indonesia.

Ginandjar also said the troubled province of Aceh would not be
among the topics discussed.

Political unrest has escalated in the gas-rich Aceh over the
past several months as separatist guerrillas have intensified
their demands for independence.

"We are still deciding on the topics. We have met with people
from the Asian Development Bank and we'll be meeting with the
World Bank at the end of this month.

"The important thing is to ensure a smooth transition of
(political) power," he said.

Ginandjar also declined to disclose how much the government
would request from CGI.

"We're still discussing it. First we have to check our balance
of payments and the estimated need for the (next) budget," he
said, adding that the government has not yet calculated the cost
of the bank restructuring program and other expenses or the
projected state revenue.(rei)