Pressure mounts to delay CGI donors meeting

JAKARTA (JP): Pressure on the government and the World Bank to delay the upcoming donors meeting, which will provide the country with a new loan commitment, is mounting, with the National Mandate Party (PAN) jumping on the bandwagon.

PAN's head of international relations department Bara Hasibuan said on Saturday the Consultative Group on Indonesia (CGI) donors meeting should be delayed until a new government resulting from the recent elections was formed.

"The transitional administration of President B.J. Habibie will soon end its term, so it doesn't have the right to make negotiations with foreigners, especially on matters which are fundamental and affect the lives of many people," he said.

Bara said PAN was also extremely concerned about the ability of Habibie's administration to manage foreign aid. He drew attention to the significant abuse of the multibillion dollar social safety net funds and other leakages.

"We urge donors grouped in the CGI to also respect the people's choice as reflected from the (provisional) elections result. The CGI must stop providing aid to the Habibie administration."

He said the National Awakening Party (PKB) and several non- governmental organizations grouped under INFID (the International NGO Forum on Indonesian Development) had joined forces with PAN in the hope of delaying the CGI meeting.

Bara said the Indonesian Democratic Party of Struggle (PDI Perjuangan) had yet to make a public statement on the issue.

"We plan to hold meetings with the World Bank and other donors to negotiate the delay."

The CGI meeting is scheduled to convene in Paris on July 27 and July 28 to decide on a new loan commitment for the country.

Deputy for international cooperation at the National Development Planning Board (Bappenas) Budhy Tjahjati said on Friday that multilateral and bilateral donors had indicated they would provide some US$5 billion in loans.

Indonesia received about $7.9 billion in aid from CGI last year.

INFID had earlier called for a delay of the CGI meeting until the formation of the country's new government.

Indonesia held its landmark elections on June 7. The popular opposition party, PDI Perjuangan, has been leading in provisional election results.

The 500-member House of Representatives will join 200 provincial and community appointees to form the country's highest legislative body, the People's Consultative Assembly (MPR). In November, the MPR is scheduled to elect a president and vice president.

Separately, chairman of Bappenas Boediono said on Saturday the government and the World Bank, which chairs the CGI, would proceed with the donors meeting, despite intensifying demands for its postponement.

Boediono said the CGI meeting was crucial for the country to obtain donors confirmation to finance the current 1998/1999 budget gap, as well as a commitment for the next fiscal year.

"The main intention of the CGI meeting is to obtain confirmation for financing the current state budget. So it's not only for the (sake of) the current government, but also for the next new government.

"You can imagine how difficult it would be for a new government to negotiate such critical overseas loans," he said.

The current state budget will end on March 31, 1999, while a new government is expected to be formed later this year.

Boediono declined to specify the loan amount needed from CGI, but it has been projected the country would need some $1.9 billion.

Indonesia needs $10.3 billion in overseas funds to finance the budget deficit. Most of the foreign aid requirement has so far been fulfilled.

Meanwhile, AFP reported that Japan would send a working-level delegation to Indonesia on Monday for talks on aid to Indonesia, ahead of the CGI meeting.

The delegation, including a senior finance ministry official, will discuss specific aid projects in the hope of rebuilding the battered Indonesian economy.

A ministry official said Tokyo viewed the upcoming Paris meeting as "a place where the international community will express their confidence in Indonesia" following the general election.

But it remained uncertain whether the Paris meeting would agree to provide a large sum of aid to Indonesia, AFP said.

The agency said concerns had been expressed on the part of the United States and European donor nations about the new Indonesian government and allegations of misuse of foreign aid.(rei)