Indonesia's donors agree on urgent need for help

JAKARTA (JP): Indonesia's traditional aid donors met here yesterday and broadly agreed on the urgent need to help the country through the economic crisis, the World Bank said.

The World Bank said in a statement that the meeting set the scene for the forthcoming meeting of the Consultative Group on Indonesia (CGI) which the bank chairs.

"International donors today (yesterday) broadly agreed on the urgent need to help Indonesia through its economic crisis," the bank said.

The bank said its officials also met yesterday with leaders of Indonesian civil society to "gauge public opinion on the crisis and its effects, and to ensure that their views will be represented at the CGI".

The bank will chair the CGI meeting on July 29 and July 30 in Paris at which donor countries pledge their aid amounts for next fiscal year.

The World Bank itself has already pledged US$4.5 billion to Indonesia over three years. At least $2 billion of that sum is for fast-disbursing assistance.

It said the Paris meeting would be the most important gathering of Indonesia's donors in decades as the country faced a serious risk of retreating into widespread poverty, unemployment and social dislocation that would be a major reversal after 30 years of economic and social progress.

The agenda of the meeting would be dominated by discussion of how the donors could assist the government with economic reforms while at the same time focusing on the social effects of the crisis and the need to protect the poor.

World Bank chief James Wolfensohn said in his letter of invitation to the leaders of international donors that the meeting in Paris was a "critical opportunity for the international community to support Indonesia in its efforts to get back on the road to recovery".

"This will require a collaborative effort among all of Indonesia's development partners, bringing together all of our collective expertise and experience, as well as our joint financial resources. It cannot be accomplished by the multilateral institutions alone."

World Bank country director for Indonesia Dennis de Tray noted that when donors gather in Paris, "their main task will be to unite behind a country that finds itself in extraordinary difficulties, even when measured by the standards prevailing in East Asia today".

"It is our responsibility to employ all the courage, wisdom, creativity and generosity we can muster to provide a truly statesmanlike response to Indonesia's needs."

Leading the World Bank's team to Paris and chairing the proceedings will be the managing director, Sven Sandstrom, assisted by the vice president for East Asia and the Pacific, Jean-Michel Severino, and de Tray.

The CGI was formed in 1990 to replace the Dutch-chaired Inter- Governmental Group on Indonesia (IGGI) which the government disbanded in retaliation for what it saw as The Hague's use of aid as a tool of pressure.

It groups all former members of the IGGI minus the Netherlands, plus five other 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.

Main IGGI creditor countries in the group are Australia, Austria, Belgium, Canada, Denmark, Finland, France, England, Germany, Italy, Japan, New Zealand, Norway, Spain, Sweden, Switzerland and the United States. (rid)