No cut expected in Japan aid to RI
No cut expected in Japan aid to RI
JAKARTA (JP): Indonesia does not expect any reduction in the foreign aid it will receive this year from Japan in the wake of last week's earthquake that devastated the Japanese city of Kobe.
"Hopefully, the Japanese government will not revise its pledged aid to Indonesia for this fiscal year amid its national tragedy. I am optimistic about its commitment," State Minister of National Development Planning/Chairman of the National Development Planning Board (Bappenas) Ginandjar Kartasasmita told reporters here on Saturday.
"But, I feel it is not ethical to question Japan's aid commitment in this situation. It is against the spirit of Pancasila to question such a pledge while the Japanese are still mourning," Ginandjar said after presenting his keynote speech at a ceremony marking the 29th graduation of students from the Institute of State Administration.
Instead, Indonesia sends its deepest condolences to Japan's government and its people over their losses in the catastrophe, he said.
Japan, which is now Indonesia's biggest donor in the Consultative Group for Indonesia (CGI), will most certainly encounter hard economic times now that many areas in the west and center of the country have been leveled by an earthquake.
Japan's Yamaichi Research Institute of Securities and Economics estimated that the total damage has reached some 5 trillion yen, while J.P. Morgan Securities Asia Ltd. calculated about six trillion yen.
The latest reports state that over 4,000 people were killed and more than 21,000 buildings were badly damaged by the earthquake.
Pledge
Under the coordination of the World Bank-led CGI, Japan has pledged $1.67 billion in aid to Indonesia this fiscal year. Its commitment surpassed the World Bank's pledge of $1.5 billion this fiscal year.
Of the Japanese aid promised, $1.5 billion would be in the form of concessional loans from the Overseas Economic Cooperation Fund and the remaining $170 million in grants and technical assistance from the Japan International Cooperation Agency.
Ginandjar said yesterday that the Indonesian government will try to reduce its dependence on foreign aid in financing its development programs.
According to its budget plan, the government expects to spend Rp 27.39 trillion (US$12.4 billion) for this fiscal year's development programs, of which Rp 10.01 trillion will be financed with foreign aid and the other Rp 17.38 trillion with public savings. Next fiscal year, foreign aid will likely contribute Rp 11.75 trillion to the government's development programs worth Rp 30.78 trillion.
The government's total foreign debt stood at $56.66 billion as of last September, as compared to the private sector's debt of $36 billion. (fhp)