President expresses relief over CGI aid
JAKARTA (JP): President Soeharto expressed relief yesterday that the World Bank-chaired group of creditors remains confident in Indonesia as reflected in its new aid commitment of US$5.36 billion.
Minister/State Secretary Moerdiono disclosed the President's feelings after he and Minister of Finance Mar'ie Muhammad briefed Soeharto in Surabaya yesterday on the outcome of the meeting of the Consultative Group on Indonesia (CGI) which ended in Paris on Wednesday.
CGI was set up in 1992 after the Inter-Governmental Group on Indonesia, a donor group coordinated by the Dutch government, was dissolved due to Indonesia's disillusionment at what it saw as the Netherlands' persistent intervention in Indonesia's domestic affairs.
Mar'ie told newsmen that the total amount of new aid pledged by CGI fully met Indonesia's requests.
Soeharto was in Surabaya yesterday to launch a passenger liner built by the state-owned PT PAL shipyard near the Tanjung Perak port.
"We don't need too large an amount of foreign aid because overseas loans are merely a supplement to the state budget," Mar'ie noted.
Mar'ie pointed out that the new commitment reflects the creditors' trust in Indonesia.
But the composition of the individual commitments, as explained by Coordinating Minister for Economic and Financial Affairs Saleh Afiff in Paris, shows that had Japan not increased its aid by US$470 million, the total commitment might have been much less than the $5.2 billion pledged by CGI last year.
Largest
Japan, the largest single creditor, pledged 187.6 billion yen ($2.14 billion at the rate of 87.5 yen per dollar), compared to 176.5 billion yen ($1.67 billion, converted at the prevailing rate in July, 1994) last year.
The second largest creditor, the World Bank, cut its commitment to $1.2 billion from $1.5 billion last year.
Except for the Asian Development Bank, which raised its pledge to $1.2 billion from $1.1 billion, most other government and development agency creditors decreased their commitments for the 1995-1996 fiscal year.
Afiff told a news conference at the end of the CGI meeting in Paris on Wednesday afternoon that the foreign aid would be used largely for the development of human resources (notably education), infrastructure for transportation, communication, electricity transmission and for environmental protection.
Mar'ie explained in Surabaya yesterday that the projects to be funded by the foreign aid were selected by the Indonesian government itself.
"We ourselves decided on the projects to be financed by the creditors," he added.
Indonesia proposes a number of development projects, listed in what the government calls the Blue Book, to the CGI members a few weeks before the opening of the CGI's annual meeting. It is up to the individual creditors to decide on which of the projects they want to fund. (vin)