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)