RI requalifies for World Bank soft loan facility
RI requalifies for World Bank soft loan facility
JAKARTA (JP): The World Bank has agreed in principle to once
again make International Development Assistance (IDA) interest-
free, soft loans available to Indonesia because the economic
crisis has dragged the nation back down into the ranks of low-
income countries, a senior minister has said.
Coordinating Minister for Economy, Finance and Industry
Ginandjar Kartasasmita said here on Monday that at an exchange
rate of Rp 8,000 to the U.S. dollar, Indonesia's per capita gross
domestic product now stands at around US$400, down from a pre-
crisis level of over $1,000.
"We are once again eligible (for IDA loans). We now have the
right to ask for this type of assistance," he told reporters
after opening a seminar on human resources organized by
Universitas Darma Persada.
"It will be of benefit to us if we can have loans with softer
terms than previous ones. The World Bank has agreed to this," he
added. He declined to provide further details, saying that the
National Development Planning Board (Bappenas) was still studying
the matter.
Loans issued under the World Bank's IDA scheme have a 40-year
repayment period, including 10 years of grace period, and do not
charge interest but only administrative fee. They are made
available to countries with a per capita income below $900.
Ginandjar explained that Indonesia first received IDA loans in
1968, but lost its entitlement to this type of assistance when it
jumped from the ranks of low-income countries to the group of
middle-income nations, as classified by the bank.
The sharp depreciation of the rupiah against the U.S. dollar
precipitated by the Southeast Asian monetary crisis has more than
halved the country's per capita income.
"Whatever things that can lighten the burden on our economy in
the future have to be done," Ginandjar said.
He explained that the decision to ask the Paris Club for debt
rescheduling had been based on the same consideration.
The government reached a deal with Paris Club creditor nations
in September in which $4.2 billion of Indonesia's $52 billion
sovereign debt was rescheduled to allow the country to focus on
financing programs of economic reform and divert resources to
help the poor through the economic crisis.
"Some people thought that rescheduling our debt was a
disgrace. We must not think that way because in the current
situation we have to save our foreign exchange earnings,"
Ginandjar said.
"It's the same with IDA loans. If we can get soft loans,
what's wrong with that? It's greatly helpful to get interest-free
loans at this point in time," he pointed out.
Asked to confirm rumors that the International Monetary Fund
(IMF) intends to postpone bailout assistance to the country as a
result of continued rioting, he said: I haven't heard of that
(the rumors). The first time I heard it was from you.".
He added that he felt sure the IMF would continue to support
the country.
"I don't think it (the riots) will have any affect (on the
disbursement of IMF loans)," he said.
At least 13 people died in the latest outbreak of rioting,
which erupted in West Jakarta on Sunday. A number of churches
were attacked and set on fire during the unrest.
On Nov. 13, clashes between antigovernment protesters and
security personnel in the capital left 15 people dead and on the
following day, Saturday 14, mobs looted and burned a number of
commercial and residential properties. (rei)