Indonesia seeks $5 billion in CGI aid
JAKARTA (JP): Indonesia is seeking at least US$5 billion in financial assistance from the World Bank-chaired Consultative Group for Indonesia (CGI) this year, or at least the same amount provided in 1995, says a minister.
Minister for National Development Planning Ginandjar Kartasasmita said Sunday that the government requested Japan in particular not to reduce its commitment during the donor group's meeting in Paris on June 18 to June 20.
He said the Indonesian government asked Japan to increase its loan commitment in yen so that the value of the Japanese loan would not decline in terms of the dollar.
"In terms of yen, Japanese loans should be increased in order to meet last year's figure, given the significant appreciation of the U.S. dollar against the yen since the CGI meeting in June last year," he told newspeople in Surabaya.
The U.S. dollar has appreciated by about 20 percent against the Japanese yen to approximately 105 yen to the dollar at present from 87 yen in June last year.
Ginandjar said he discussed Indonesia's proposal with Japanese officials on his recent trip to Tokyo, but the Japanese government had yet to respond to the proposal.
"The appreciation of the U.S. dollar against the yen will be one of the important subjects to be raised in the coming CGI meeting," he said.
He assured that the government's decision in February to give special treatment to PT Timor Putra Nasional to produce a national car would not affect Japan's loan commitment.
"The Japanese government did not raise any objections related to the national car project in the meeting," he said.
The Indonesian government's national car project, which provides tax breaks to Timor Putra, has been widely opposed by Japanese carmakers, who charge that the project is against the free trade and investment principles set by the World Trade Organization (WTO).
The World Bank said recently that it would recommend to CGI that it provide at least the same amount as last year at their coming meeting.
The World Bank-chaired group of creditors provided $5.36 billion in financial aid last year.
Japan, the single largest creditor, pledged 187.6 billion yen ($2.14 billion at the rate of 87.5 yen per dollar) last year, compared to 176.5 billion yen ($1.67 billion, converted at the prevailing rate) in 1994.
The second largest creditor, the World Bank, cut its commitment to $1.2 billion last year from $1.5 billion in 1994.
Except for the Asian Development Bank, which raised its pledge to $1.2 billion last year from $1.1 billion in 1994, most other government and institutional creditors decreased their commitments last year.
CGI was set up in 1992 to replace the Inter-Governmental Group on Indonesia, a donor group coordinated by the Dutch government, which was dissolved due to Indonesia's disillusionment at what it saw as Netherlands' persistent intervention in Indonesia's domestic affairs.
The Consultative Group for Indonesia groups all former members of its predecessor except the Netherlands, plus five new creditors -- South Korea, the Kuwait Fund for Arab Economic Development, the Saudi Fund for Development, the Nordic Investment Bank and the Islamic Development Bank.
The creditor countries carried over from CGI's predecessor are Australia, Austria, Belgium, Canada, Denmark, Finland, France, England, Germany, Italy, Japan, New Zealand, Norway, Spain, Sweden, Switzerland and the United States. (hen)