RI looks for $4.8b loans from CGI donors

RI looks for $4.8b loans from CGI donors

JAKARTA (JP): Indonesia is seeking some US$4.8 billion in
loans from its traditional international donors grouped under the
Consultative Group on Indonesia (CGI) to help finance the budget
deficit in 2001, according to Coordinating Minister for the
Economy Rizal Ramli.

Rizal said the amount included a carry-over from the unused
portion of the $4.7 billion pledged by the donors last year.

Speaking to reporters after a meeting with Jakarta
representatives of the CGI members, Rizal said that although no
specific figure was discussed, the donors seemed to be
"supportive" of the government's economic reform programs,
including the plan to develop small- and medium-size enterprises
and infrastructure in rural areas.

"In general, the meeting was very productive and almost all
participants showed strong support for Indonesia's economic
recovery process," he said.

The upcoming CGI meeting will be held in Tokyo on Oct. 17.

The 2001 state budget is forecast to have a deficit of some Rp
53 trillion ($6.24 billion).

The government will use the CGI loan, in addition to proceeds
from the privatization program and from the sale of assets under
the Indonesian Bank Restructuring Agency (IBRA), to finance the
budget deficit.

"The donors have expressed their support to ensure that the
CGI meeting will be successful," Rizal said.

He admitted, however, that the donor representatives had
expressed some concern, including over the recent killing of
United Nations humanitarian workers in Atambua, West Timor.

Rizal said he had assured the donors that the government would
investigate the case and take legal action against those
responsible for the incident.

He added that the donors also questioned the problems
Indonesia might face when implementing the regional autonomy and
fiscal decentralization policies early next year.

He said the concerns included the impact of the new state
budget policy and a fear that regional government would rush to
issue bonds to finance their development program which would
create a fiscal problem.

Rizal assured the donors that the central government would
only allow the bond issuance once the institution and ruling had
been established.

"The most important thing is that we fully realize that the
benefit of the decentralization policy will be felt in the
medium-term, and, of course, in the short-term there will be some
problems ... but we will resolve this to ensure a smooth
transitional process," he said.(rei)