President pledges to use loans for productive plans
President pledges to use loans for productive plans
JAKARTA (JP): President Soeharto promised here on Saturday
that the forthcoming aid from the Consultative Group on Indonesia
(CGI) will be used strictly for financing productive development
projects.
"The fresh CGI aid will not be used for consumptive activities
but rather for productive ones," the President was quoted by
finance minister Mar'ie Muhammad as saying on Saturday.
Speaking to reporters after meeting with the President to
report on the outcome of the CGI meeting in Paris late last week,
the minister said that loan commitments from the World Bank and
the Asian Development Bank declined slightly.
The minister said that the drop in loan commitments is not an
indication that the confidence of the two banks in the Indonesian
economy has declined.
The CGI, which groups 19 donor countries and 13 international
financial agencies, agreed on Friday to provide US$5.20 billion
in fresh aid to Indonesia for the current 1994-95 fiscal year, a
slight increase from $5.11 billion the previous fiscal year.
The aid committed by the World Bank dropped to $1.50 billion
from $1.60 billion, while that of the Asian Development Bank fell
to $1.1 billion from $1.2 billion.
Appreciation
The minister, who was accompanied by Rahardi Ramlan, the vice
chairman of the National Development Planning Agency (Bappenas),
said that the World Bank-chaired donor organization appreciated
the government's consistent efforts to improve the economy
through a number of deregulation measures.
"The CGI members understand that Indonesia still needs time to
settle problems such as its non-performing loans," the minister
said, adding that debt problems are common in other countries.
Mar'ie explained that Japan is the largest donor at present
with aid commitments totaling around $1.67 billion, comprising
$1.3 billion for project aid, 200 million for fast-disbursement
aid and the remaining $170 million in the form of grants.
Around $200 million of the $1.3 billion earmarked for project
aid will be used to support the government's program to improve
least developed villages beginning next fiscal year, Mar'ie said.
Meanwhile, Attorney General Singgih said that his office will
further tighten control over the use of foreign aid even though
no deviations have been found thus far.
"No finding has so far been made about the deviation of the
foreign aid utilization," he told reporters who asked him about
what became of previous foreign aid funds. (hen)