Pressure mounts to delay CGI donors meeting

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)