New legislators say credible government key to aid resumption
New legislators say credible government key to aid resumption
JAKARTA (JP): Newly installed legislators said on Saturday
that Indonesia must immediately create a new credible government
in order for foreign donors to resume lending the badly needed
aid.
Theo F. Toemeon, a legislator representing the Indonesian
Democratic Party of Struggle (PDI Perjuangan), said a new
credible government would restore confidence in the country.
"What's more important is that with the installment of a new
credible government, the US$80 billion parked overseas will
return home," he said, referring to overseas deposits of local
businesspeople, who fear domestic political unrest.
Theo was speaking on the sidelines of the second day of the
General Session of the People's Consultative Assembly (MPR), the
country's highest legislative body, which will elect the next
president on Oct. 20.
Theo, a savvy currency analyst, said that if the country
failed to form a new credible government, confidence and the
rupiah would tumble, which would bring the country into another
round of crises.
Theo was responding to reports that Indonesia risks losing
some $4.7 billion in loans until March 2000, the end of the
current 1999/2000 fiscal year.
According to a World Bank document, the loans include
budgetary support from the bank and other donor countries
including Japan. Also in jeopardy are loans from the
International Monetary Fund (IMF).
The report said that by the end of September, a total of $1.37
billion in loans from the IMF, the World Bank and the Asian
Development Bank had been put on hold.
The three multilateral institutions have demanded a swift and
satisfactory resolution to the Bank Bali affair, which allegedly
involved the inner circle of President B.J. Habibie.
The IMF and the World Bank have expressed disappointment over
the government's decision not to disclose the full
PricewaterhouseCoopers audit report on the bank scandal.
The suspension of the foreign aid comes on top of statements
from government officials that the $1.5 billion privatization
proceeds and the Rp 17 trillion bank assets sale target to help
finance the current state budget might not be accomplished amid
the current political uncertainty.
Several analysts have said suspension in the aid disbursement
is an indication from the fund and the World Bank for Habibie to
step down.
"That's absolutely not true," said Priyo Budi Santoso, a
legislator from the Golkar Party.
"I warn the IMF and the World Bank not to enter into the
political arena.
"If they do, Habibie and the whole nation will come together
to fight foreign intervention," said Priyo, a Habibie loyalist.
But Marzuki Darusman, chairman of the Golkar faction at the
MPR, dismissed the claim.
"Don't be trapped by such a narrow nationalism," he said.
"It's their money, so it's just logical for them (donors) to
wait until a credible government has been formed."
Marzuki, who is known to be a strong opponent of the Habibie
Golkar camp, said the existing government was no longer
functioning.
"The ministers have resigned ... where's their
responsibility?," he said.
Several senior ministers, including Coordinating Minister for
Economy, Finance and Industry Ginandjar Kartasasmita, recently
resigned in order to take their places at the MPR and vote for
the next president.
Golkar chairman Akbar Tandjung said on Saturday that the 700-
member MPR would hold the presidential election on October 20, a
date much earlier than the initial schedule of Nov. 10 set by the
election committee.
Habibie and chairwoman of PDI Perjuangan Megawati
Soekarnoputri are the strongest contenders in the presidential
race.
Megawati is the most popular presidential candidate.
Habibie's chances of reelection appear increasingly dimmer,
due to the East Timor problem and the Bank Bali scandal.
The Bank Bali scandal revolves around the "illegal" transfer
of Rp 546 billion from the bank to PT Era Giat Prima (EGP), a
private firm linked to the Habibie camp. The funds were a
commission fee to help the bank recoup interbank loans on a
closed-down bank which is guaranteed by the government.
There have been allegations that several senior government
officials and other people close to Habibie have abused their
positions to help EGP raise money for political purposes ahead of
the presidential election. (rei)